We have seen a rising number of fraud claims for farmers since the start of the Coronavirus pandemic. Ensure you are making your clients aware of the risks by giving them tips on how they can avoid becoming a victim.
As fraudsters spot new opportunities to access money, information, and software during the Coronavirus pandemic, it is important to make your clients aware of recent occurrences, to help educate in avoiding any attacks.
Examples of recent third-party fraud or forgery claims
Buying outside of online trading platforms
The insured was the victim of fraud when bidding on a Sheep Handling System. When the online auction ended, the insured was not the winning bidder. The insured was then contacted directly by email by an individual claiming to be the seller, to advise that the winning bidder was a ‘time waster’ and that he was prepared to sell the Sheep Handling System to the insured for £3,000. Thereafter, there was an exchange of emails between the seller and the insured. The insured requested additional photos of the system and was sent these. The insured was then sent an invoice, purporting to be an official invoice from the online platform. The insured contacted the online platform by telephone using a number from the genuine website in order to confirm that the invoice was legitimate. They advised that it was genuine, and on that basis the insured made a BACS transfer to the individual. The purported seller was in regular contact during this time.
The insured raised concerns when the item did not arrive on the scheduled delivery date. The purported seller made a number of different excuses until eventually going silent. The insured contacted the online platform to report the matter and was told that they would be unable to offer indemnity through their Buyer Protection because the transaction had been concluded outside of the platform. The website owner refused to investigate the insured’s claim that it sought confirmation that the invoice was legitimate. The insured reported this matter to their bank and Police, but the bank ultimately advised that no funds have been recovered and they will not be reimbursing the insured for the loss.
How did Rural Protect help?
The insured made a claim under the Third-party fraud cover under the Rural Protect policy and was reimbursed for the loss.
Paying chased Invoices
The insured was the victim of an email interception fraud in two parts. A total of around £30,000 was paid to a fraudulent account. The insured’s bank and the Police were informed of the fraud upon discovery. The insured had received a genuine invoice from a supplier. The invoice was thereafter accessed by a fraudster, amended to add the bank details of a fraudulent account, and then re-sent to the insured by email chasing payment. The insured paid the invoice via online banking and thought nothing of it.
Thereafter the fraudster repeated the scam with another supplier’s invoice. Once again, it was intercepted, amended and re-sent in an email chasing payment. The insured again paid via online banking and thought nothing of it. The fraud was discovered when one of the suppliers sent a further invoice which showed the payment as outstanding. No funds were ultimately recovered by the bank.
How did Rural Protect help?
The insured was reimbursed up to their limit of indemnity (£10,000) and was therefore still suffering an uninsured loss of around £20,000 upon conclusion of the claim.
The standard fraud limit of £10,000 can be increased in bands up to £100,000 with premiums starting from as little as £75 + IPT. It is important that you check with your client the sums of money that may be at risk to ensure the correct level of cover is provided, protecting you, but more importantly, them!
How can your clients avoid such claims?
Fraudsters deliberately attack businesses and individuals that they consider to be vulnerable. Farmers and rural businesses are regular targets as fraud prevention systems are often weak.
We offer some tips for your clients to help prevent against fraudulent activity.
- Be on guard to bank changes – changes of bank details should be requested on headed paper or confirmed over the landline telephone number with a known contact of the supplier. Modern banking systems also include warnings before transfer to account details that do not match those held.
- Dual-controls – ensure dual-controls are in place and segregation of duties for payment of invoices.
- Protect bank accounts – ensure your clients have created separate bank and credit card accounts for personal life and business. If fraudsters get their hands on one account, they won’t have access to the other.
- Safeguard computer systems – A firewall can protect company data, while antivirus software can help detect breaches prior to the criminal activity happening. It is also a good idea to consider backing up files on a daily or weekly basis, and have another way of storing them. If something does happen, you will be able to retrieve your files without having too much of an issue.
- Be wary of emails, texts and calls – most cyberattacks come in the form of phishing, where an external email persuades recipients to enter personal information. Check the email of the sender, does it look genuine? Are there any spelling mistakes? Also, if you receive calls or texts asking for your personal details, you should think, is this genuine? Banks never request for personal information, including your PIN and passwords over the phone.
- Employee background checks – when expanding the workforce, it is important not to rely on references and work history. It is recommended to do a thorough background check on new employees to ensure trust.
Our standard cover options have an aggregate limit of £10,000 for Rural Protect and £5,000 for Rural protect Elements.
Rural Protect policies can be amended to £25,000, £50,000, £75,000 or £100,000.
Rural Protect includes access to leading law firm rradar, who use digital tools to educate, manage and advise on ways agricultural businesses can reduce their legal risks and be there for your clients should the worst happen.
Find out more about Rural Protect, here, or contact the HB Underwriting Team on 01653 609090.
