Financial Crime World

Cash-on-Delivery Scams on the Rise Amid Pandemic

Manila - The COVID-19 pandemic has brought about a worrying trend in cash-on-delivery (COD) scams in the country, with criminals using fund transfer services and private couriers to carry out their illegal activities.

A Growing Concern

According to the National Capital Region Police Office (NCRPO), an estimated PHP171 million worth of drugs were confiscated from March 15 to May 10, 2020, a significant increase from less than five kilograms seized during the same period last year. The majority of these arrests took place at road checkpoints.

How it Works

The modus operandi is as follows:

  • Sellers post drugs on social media
  • Buyers contact them through social media and pay for the goods via fund transfer services, such as online COD or electronic money transfers
  • The drugs are then sent to the buyers via private couriers or ODCS

Reports of Suspicious Transactions

Despite the increase in suspicious transactions reported during the enhanced community quarantine (ECQ), only a small percentage of these reports were related to COVID-19 and lockdown-related activities.

Tips for Reporting Suspicious Transactions

To better track and report such suspicious transactions, the Anti-Money Laundering Council (AMLC) has advised covered persons (CPs) to use keywords such as:

  • “COVID-19”
  • “ECQ”
  • “pandemic”
  • “lockdown”
  • And other relevant terms when reporting these transactions

Warnings and Precautions

The AMLC also warned CPs to be cautious of money launderers and perpetrators who may be using the digitization of financial services, such as digital KYC/CDD, to their advantage. As unemployment rises, criminals may entice individuals to sell their profiles to create pass-through or money mule accounts.

In addition, EMIs, MSBs, and other online fund transfer services are advised to be vigilant against suspicious transactions related to online activities, which have seen a significant increase since the pandemic began.

The AMLC has also recommended that CPs use transaction behavior analysis and other innovative customer due diligence (CDD) methodologies to detect and prevent illegal activities.

Protect Yourself from Cash-on-Delivery Scams

With the rise of cash-on-delivery scams, it is crucial for individuals to be aware of these modus operandi and take necessary precautions to protect themselves from falling prey to these criminal schemes.