Not-So-Friendly Fraud Warning
The National Business Crime Solution (NBCS) has helped uncover an audacious “friendly fraud” scam described as the almost perfect crime, and we are now warning other non-member businesses to check their “goods lost in transit” (GLIT) refund data to make sure they too have not fallen victim to the scam.
After one retail member raised suspicions about anomalous patterns in courier-related refund claims linked to GLIT, we began an investigation utilising our Claims Detect Online (CDO) software which monitored thousands of transactions to identify and then disrupt this growing trend of refund fraud before instigating civil recovery claims on behalf of multiple high street retailers.
These specific incidents of so-called “friendly fraud” work through third-parties or moderators who advertise their ”fraud as a service” (FaaS) scam across social media after having obtained access to a courier company’s confidential tracking details by using social engineering deception techniques.
The courier company which formed part of the investigation—although there are likely to be more delivery business impacted—is now also working with Action Fraud and the National Cyber Security Centre and has launched a dedicated taskforce within its own business to crack down on the practice.
NBCS discovered that once inside the tracking software, the fraudsters are able to manipulate the proof of delivery data such as the GPS tracking and even the doorstep delivery photographs to make it look like a different property.
The “customer” then makes a goods not received claim, keeps the product for themselves or re-sells on the black market, and then obtains a full refund—the result being that the retailer who the order was placed with is twice out of pocket while the courier business is out of favour.
The middleman fraudsters who market their service through non-regulated social media platform Telegram, as well as closed Facebook groups, then take their cut—as much as 20 per cent of the refund value—through cryptocurrency accounts which are notoriously difficult to monitor.
Impacted courier companies are now tightening procedures around access to their handheld device pin numbers that record proof of delivery to prevent it falling into the wrong hands and mandating the NBCS to target the fraudsters by infiltrating the social media platform forums.
The known fraud so far is more than £395,000 in refunds for one company alone—claims which have now been challenged and recovered by the NBCS on behalf of the retailers in question, through CDO’s civil recovery claims service, which include the threat of County Court Judgements (CCJs) for failure to comply with the order.
“It was almost the perfect crime, with fraudsters able to create an eco-system whereby those purchasing their service receive their ordered goods and then get a complete refund, and almost without leaving a trace,” said Lyndsey Owen, NBCS’s online fraud and risk specialist.
“They are in the position to either keep the goods for themselves or sell them on the black market and no one is the wiser, while the courier company takes all the blame,” she added.
“Once the refund has been received, the moderator who has been able to manipulate the delivery data receives their cut, often through difficult to trace cryptocurrency.”
NBCS, which has passed the detailed evidence package to Action Fraud for investigation, is now urging other retailers and courier companies to analyse their own refund data.
“What we have uncovered is likely to be the tip of a very large iceberg—other retailers will be targeted and at present will not be aware of this sophisticated hack.”
“We issued one civil recovery demand on behalf of one of our members for almost £20,000, it was paid straight away in full to avoid us taking it to the next level of a CCJ and us launching a criminal prosecution,” she added.
“In a world where many civil recovery claims for a few hundred pounds are negotiated to repayments in instalments, who can afford to re-pay such sums straight away other than those with the kind of deep pockets created from the proceeds of crime?”
Anyone who wishes to explore their own suspicious claims can contact NBCS which can deploy CDO to analyse refund data and, if necessary, instigate civil recovery claims to re-coup losses and disrupt online fraud activities.Back to news articles