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Welcome to our latest edition of our Financial Crime Awareness Bulletin.  This bulletin considers recent developments and trends in the Financial Crime sector and is designed to bring them to your attention.

Nigerian or “419” type frauds 

There are various different types of “Nigerian fraud,” which combines the threat of impersonation fraud with a variation of an advance fee scheme. The most typical (and identifiable) is the one in which a letter mailed, or e-mailed, from Nigeria offers the recipient the “opportunity” to share in a percentage of millions of dollars that the author—a self-proclaimed government official—is trying to transfer illegally out of Nigeria. The recipient is encouraged to send information to the author, such as blank letterhead stationery, bank name and account numbers, and other identifying information using a fax number given in the letter or return e-mail address provided in the message. The scheme relies on convincing a willing victim, who has demonstrated a “propensity for larceny” by responding to the invitation, to send money to the author of the letter in Nigeria in several instalments of increasing amounts for a variety of reasons.

Payment of taxes, bribes to government officials, and legal fees are often described in great detail with the promise that all expenses will be reimbursed as soon as the funds are spirited out of Nigeria. In reality, the millions of dollars do not exist, and the victim eventually ends up with nothing but loss. Once the victim stops sending money, the perpetrators have been known to use the personal information and checks that they received to impersonate the victim, draining bank accounts and credit card balances. While such an invitation impresses most law-abiding individuals as a laughable hoax, millions of pounds in losses are caused by these schemes annually. Some victims have been lured to Nigeria, where they have been imprisoned against their will and have lost large sums of money. The Nigerian government is not sympathetic to victims of these schemes, since the victim actually conspires to remove funds from Nigeria in a manner that is contrary to Nigerian law. The schemes themselves violate section 419 of the Nigerian criminal code, hence the label “419 fraud.”

Tips for avoiding Nigerian Letter or “419” fraud 

  • If you receive a letter or e-mail from Nigeria, a Nigerian sender, or any anonymous email addresses asking you to send personal or banking information, do not reply in any manner. Report the matter to Action Fraud and NCIB:

 

 

  • Be sceptical of individuals representing themselves as claiming a refund or a benefit and asking for your help in placing large sums of money in overseas bank accounts.

 

  • Do not believe the promise of large sums of money for your cooperation.

 

  • Guard your account information carefully.

 

Email payment fraud – Conveyancing example

How does email payment fraud happen? 

An increasingly common example of email fraud occurs in the conveyancing industry.

Email payment fraud occurs when a fraudster hacks into the email communications between a client and a company. The scammer places malware into a computer which will lie dormant until it recognises specific keywords relating to a request for funds or deposit payment.

This is the stage at which fraudsters make their move. They will contact the client, disguised as their solicitor, informing them that the company’s bank details have changed and requesting that they transfer the funds into the ‘new’ account. Fraudsters are listening to emails and building up a timeline of the conveyancing activity. About 3 months into the transaction, they’ll contact the buyer by email asking buyers to send the deposit. As they’ve been intercepting the emails, they’ll be aware of the template and will be able to produce an authentic-looking email. The fraudsters will then quickly withdraw the money, usually sending it overseas. 

What should I look out for?

It is important to emphasise that the likelihood of a company changing its bank account details is very low. The client’s solicitor will not send you a last-minute email telling you that bank account details have changed; this should be your first warning sign.

How can we protect ourselves ?

A reminder to be wary of any emails discussing payment details, and to double check its legitimacy before sending payment. Always confirm any requests directly, ideally in person or by the telephone, to ensure the instruction is genuine.

Ensure existing contact details are used

Other dangers lurking in fraudulent emails.  When you contacted the company you are making the payment to, it is important not to use the contact details from the email you have just received.  If the email is fraudulent, then the contact details are also likely to be false.

All conveyancers regulated by the SRA are reminded of their obligations to keep client money safe through appropriate systems. However, working practices will vary from firm to firm. If you’re concerned about the processes in place, discuss this with your conveyancing solicitor.

FATCA imposes a withholding tax of 30 percent non-refundable tax on income from the United States paid to certain types of FFIs and NFFEs.

 

If you would like to know more about further financial planning services we can offer please e mail or call us to discuss:

London      020 7871 5387

Brighton       01273 457100

Horsham      01403 333666

info@opusgold.com

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