Personal Protective Equipment Fraud a threat to procurement?

Personal Protective Equipment Fraud a threat to procurement?

As early as the beginning of March, Facebook pledged to target and take down advertisements of personal protective equipment (PPE) from its platform, alerted by the rise in e-commerce scamming, prices inflation, and first responders’ shortages.

A recent report exposed that PPE was still being sold on the platform. In fact, when an individual decided to purchase 10 masks following a Facebook ad, he had to pay $227.90 but never received the order.

These were the early signs of growing fraudulent activity during the COVID-19 pandemic that transgressed borders and presented a new obstacle for law enforcement and regulatory bodies.

In the midst of the first responders’ shortages of PPE in April, a senior procurement manager for the NHS created an online website for the private sale of NHS purchased PPE.  The products included protective face shields, gloves, gowns and hygiene products meant to be purchased in bulk.

Investigation

An investigation by the Guardian revealed that the minimum purchase was of 10,000 units. The business activity was yet to undergo NHS approval, but according to the newspaper, an internal investigation commenced instead looking into the potential conflict of interest.  The NHS procurement manager later decided to consider purchases from the NHS with a 30-days leeway to pay for the purchased equipment. Following these findings, the NHS commenced an inquiry into the case after protests in London took place from medical staff about PPE shortages and staff safety.

As the UK government is easing administrative requirements and fast-tracking barriers to imports and production of essential PPE tools, the risk of fraudulent activities is growing in the UK market at the expense of the safety and protection of NHS staff.

Scammers have been using unusual marketing platforms such as LinkedIn, usually used for professionals connecting with one another, which speaks to the magnitude of fraud risk in place, taking advantage of widespread advice from governments for the wear of PPE.

Fake online shops

As the UK’s National Cyber Security Centre is said to have taken down nearly 500 fake online shops that were selling fraudulent protective equipment, NHS staff have struggled to obtain the necessary protection to take care of COVID-19 patients.

To help prevent fraudulent activity, we are advising strict adherence to NHS issued guidelines for senior procurement managers in conducting due diligence when onboarding new suppliers. We are simultaneously advocating for continuous fraud risk assessments to verify the business and its activities to rule out involvement in money laundering schemes.

Prevention measures

As a customer, to protect yourself from fraud when purchasing PPE equipment, you should research the merchant’s Internet history. This might involve a look into the date of website creation and a confirmation of valid address and telephone number for the contact. An absence of records thereof might be a sign of fraudulent activity.

Additionally, customers should be vigilant and check reviews of products before making a purchase. As there are known to be a lot of fake reviews online, we would advise checking the dates of comments posted to see if it is part of an incentivised campaign, check the language used in terms of an exaggerated customer satisfaction among all comments and checking out the less positive reviews.

Finally, contact your bank immediately and report any suspicious activity to Action Fraud if you think you have been a victim of fraud.

Mariya Babikyan | Analyst

Marc Mercer | Board Advisor

Please get in touch on +44 (0) 173 252 5810, +44 203 963 1930 or email info@tenintel.com to speak with our team if you think you might be a victim of fraud or are concerned with your organisation’s vulnerabilities. We can help you analyse the evidence, circumstances surrounding the suspicion and set out clear objectives in an investigation plan.

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