Can you believe it’s been 15 years since the Madoff scandal was uncovered? 15 years since the global financial crash. In fact, it was that incident that signalled the end for Bernie Madoff, the financial sociopath, who – under the guise of being a successful co-founder of the NASDAQ and one of the most successful stockbrokers on Wall Street – cunningly duped thousands of wealthy private and individual investors in his eye poppingly brazen investment scam worth billions. 2008 was the year where ‘Ponzi Scheme’ (and quantitative easing) became part of the modern vernacular.
Madoff probably sparked our obsession with financial crime. Which shows no sign of abating, if some of Netflix’s most popular shows are anything to go by. Docuseries ‘Madoff, the Monster of Wall Street’ is one. ‘Bank of Dave’ is another, where a self-made car dealer decides to set up his own local bank when the big financial institutions fail the people in his small town. And ‘Trust No One’ is about the sudden death of a founder of a cryptocurrency exchange and irate investors realising there’s more to his death than meets the eye.
So why this fascination with financial crime? Why are we so enthralled by fraud and scams that involve millions and billions of dollars and victims left in their wake?
Unfortunately, financial crime is an integral part of society and a threat we all face. Financial crime is proliferating, with the cost-of-living crisis. If people are struggling financially, unfortunately many will get caught up in financial crime with the lure of making easy money. And it’s not just individuals. Organised crime gangs are the biggest beneficiaries – revenue from traditional crime routes like drugs and racketeering, dwindled in the pandemic, which accelerated the incidence of fraud.
So what frauds and scams are we likely to fall victim to? Here are some of the most popular:
- Energy scams: the government’s energy bill rebates were an opportunity for fraudsters – in two months at the end of 2022, Action Fraud received over 350 reports of fake messages purporting to be from the UK Government. Criminals have also been capitalising on the government’s cost of living scheme.
- Cyber fraud: the rise of ransomware attacks and phishing has soared as more consumers turn to digital methods. Combine this with identity theft and the opportunity for cyber criminals has never been greater.
- Pension and investment fraud: this increased tenfold in the pandemic – investors are conned into transferring their pensions or investment pots to fraudulent operations that expertly mimic banks and wealth managers.
- Money mules: criminals target students, people on benefits and low earners to exploit their bank accounts to launder money.
- HMRC: time of the year again when text messages appearing to be from HMRC to advise of either tax refunds, tax due or legal action. Basically, anything to encourage the recipient to respond and share bank details or make payments.
The spectre of fraud hangs over us all. And we have to have our smarts about us. These criminals are duplicitous – and very credible. A lot of time and effort is put into scamming us into thinking the person we are speaking to, or sending our details to, isn’t fake. And vulnerable people in particular are a big target. It’s an awful starting point to say not to trust – but unfortunately in this day and age where a fraudster is only a click on a link, or an answer of a phone call away, it has to be the standard.
If you want to speak to someone at Valcon about how to ensure your money laundering, fraud, bribery and corruption, sanctions or market abuse framework (including procedures, systems and controls) are up to the task, get in touch [email protected]