(Editor’s Note: The views are that of the author’s. For the writer’s other interests, read the credit line at the end of the article.)
By Rajiv Prakash Saxena
If you have a job; your company is still operating; the company pays you daily, weekly, fortnightly or monthly, be very grateful for the good fortune. Here is the COVID-19 massacre in the United States, United Kingdom, and many parts of European Union:
- Victoria’s Secret filed for bankruptcy
- Zara to close 1,200 stores
- La Chapelle withdrew 4,391 stores
- Chanel is discontinued
- Hermes is discontinued
- Patek Philippe stopped production
- Rolex suspended production
- The world’s luxury industry has crumpled
- Nike has a total of $23 billion preparing for the second stage of layoffs
- Gold’s Gym filed for bankruptcy
- The founder of Airbnb said because of the pandemic, 12 years of efforts were destroyed in six weeks as international travel either for business or leisure is down to almost naught
- Even Starbucks announced permanent closure of 400 stores, and
- WeWork isn’t in a great spot either.
The list goes on and on.
The US economy landscape is downright grim and outlandish too:
- Nissan Motor Corp. may close down in US
- Biggest car rental company (Hertz) filed for bankruptcy, they also own Thrifty and Dollar
- Biggest trucking company (Comcar) filed for bankruptcy, they have 4,000 trucks
- Oldest retail company (JCPenney) filed for bankruptcy, to be acquired by Amazon for pennies!
- Biggest investor in the world (Warren Buffett) lost $50 billion in the last two months
- Biggest investment company in the world (BlackRock) is signaling disaster in the world economy, they manage over $7 trillion worldwide
- Biggest mall in America (Mall of America) stopped paying mortgage payments
- Most reputable airline in the world (Emirates) laying off 30 per cent of its employees
- US Treasury printing trillions to try to keep the economy on life support, and
- Estimated number of retail stores in 2020 that are closing: 15,000
The following are big retailers that have announced closure:
- J. Crew
- Bath & Body Works
- Forever 21
- Pier 1 Imports
- Destination Maternity Corp.
- AC Moore
- Art Van Furniture
- Olympia Sports
- Specialty Cafe & Bakery, and many more.
Since the economy is going down and people are under lock down, only industry which is growing by leaps and bound is the business of fakers, online bank frauds and cyber frauds.
Here are few case studies to outline the growing menace in these troubled times, where any hope shown results in frauds:
The lock down has left many without a job across India. The situation led to one such 35-year-old, who is the owner of a bookshop in a Navi Mumbai mall, turning into a vehicle thief. Vashi cops, who were on the lookout for a person, who had been stealing vehicles from Juhu Gaon, finally arrested the thief after over a month.
A duplicate branch of State Bank of India, running for the past three months, was identified and closed down by the Tamil Nadu Police after officials of the State-run lender found out, and filed a complaint.
Among the three people arrested in the matter is a son of the bank’s former employee, who had become well-versed with the operations of the bank during his various visits over the years.
The fake bank branch was opened at Panruti in the Cuddalore district of Tamil Nadu. However, police claim that so far no customer has reported having lost money in the branch. Bank officials requesting anonymity confessed that the bank officials were made aware of another branch in the city after which they lodged a complaint with the local police.
Officials from the genuine bank branch in Panruti, upon visiting the fake branch, found that the infrastructure mirrored that of official branches of the bank. Police officials said that main accused had procured lockers, technological hardware and other documents for the duplicate bank. He had applied for his father’s bank job but his application was delayed. Surprisingly, no customers from the city have reported any loss of money at the fake branch. The main accused, who is said to be the brains behind the operation, told police officials that his intention was never to cheat people but he only wanted to open a bank for himself. Quite innovative.
Probe into a credit card fraud busted by the Mumbai Police, in which bank accounts of tribal women in Jharkhand were allegedly used to make fraudulent transfers, has revealed that the accused made transactions worth nearly Rs 79 lakh ($105,432) over a period, using 13 different bank accounts belonging to tribal women. The police busted the racket and investigations are still under way.
The arrested had convinced the tribal women to open the bank accounts, while those absconding made calls to credit card holders and defrauded them. Such conning happened during the lock down with promises of jobs, gifts, school, and college admissions and even transportation to the desired destinations of poor people.
Fraudsters created websites to give fake visas and swindled several millions from foreigners and Facebook friends promised gifts by befriending ladies, with fake calls from customs officials who took online payments for fake custom duties.
Twitter hacking was a typical case of fakers perpetuated using names of established celebrities, who indulge in charities. The details of how Twitter–Bitcoin hack occurred this week are as yet unclear.
What we know is that somebody gained access to about 130 verified and highly followed ticked Twitter accounts and used that access to scam an estimated $120,000 equivalent. This list of hacked Twitter accounts included those of high-profile world-renowned Elon Musk, Bill Gates, Barack Obama, Apple, and Uber.
The hacker or hackers sent out a series of identical messages. These essentially solicited bitcoin donations into a couple of cryptocurrency wallets with a promise that the sender would reciprocate by sending back double the amount to the donors. Smart game.
Elon’s first scam-tweet, for instance, said he would double any payment sent to a given bitcoin wallet because he was feeling generous due to COVID-19 pandemic. The other messages from other verified accounts were identical or similar, with minor variations and at least one other bitcoin wallet mentioned.
These were all verified blue tick twitter accounts, with two factor authentications enabled in many cases. According to Twitter, which shut down access to all verified accounts for a brief period, while passwords were not compromised. The hacker or a group of hackers gained access to the tools used within Twitter to spoof these messages.
How the hackers did this pun or a scam is not very clear. The hack may have been done by a rogue Twitter employee, or it may have been smart hack into the twitter system, or it may have been a social hack where someone conned Twitter’s employees into giving them friendly access. Some people fell for the scam and transferred bitcoins equivalent to $120,000 to the referred wallets.
Bitcoin traded at around $9,100 when this hack happened, so there was a total of 13 coins transferred to these wallets. Each coin can be broken up into multiple, unique micro units, down to a Satoshi, which is one-hundred-millionth of a bitcoin. There may have been a large number of people who fell for the scam for sure.
Bitcoin is famous for its blockchain, the electronic ledger which can be accessed by anyone who cares to do so. Blockchains are relatively difficult to hack. Every bitcoin transaction has to be verified by a majority of blockchain users and every transaction ever made in bitcoin is recorded on the blockchain.
Transfers of hacked coins on crypto-exchanges outside of the jurisdiction of US law enforcement will be impossible to stop. It is very likely that the victims will never get back their hard earned money. Luckily Twitter stores very little in the way of sensitive personal information, even about verified accounts. The US also has a good setup for investigating cyber-crimes. What happens in India with poor data protection rules is anyone’s guess.
Russia has been accused of trying to steal United Kingdom’s research into a COVID-19 vaccine in a state-sponsored cyber-attack. The National Cyber Security Centre told Boris Johnson it had the “highest level of confidence” that the Kremlin was behind the “ongoing” attack, which was also verified by the US and Canada.
Both University of Oxford and Imperial College London, the two British teams trying to develop a vaccine, are understood to have been targeted. Security sources refused to say whether any attempts to steal information had been successful. The cyber security centre said the hack was part of an ongoing campaign of “malicious activity” that began in around February or March when Coronavirus became a pandemic. Billions of dollars are at stake if the vaccine production process is hacked by Russian agency.
During COVID-19 times, interesting conning is taking place in faking dematerialised accounts. A short messaging service of an account holder’s phone beeped, he had bought a particular number of shares in a blue-chip company, which he had never given orders for. Such orders are normally reconfirmed by 4 p.m. on the given day by the broker using phone calls by a different operator, which was also not done in this case.
The stock was sold in early morning trade and another stock was purchased using the dematerialised account without any order or reconfirmation again on the next day. The total trading amount was around Rs. 3.5 lakh ($4670) but the account-holder got worried and complained when a phone call came that in order to square up the deal, the author had gone into a debit after settlement. The matter is getting investigated by the trading company as how the systems were bypassed.
Thugs are remotely taking control of phones of those unable to repay loans, threatening to leak photos, shaming them among all their contacts. Amid the financial crisis that the COVID-19 induced lock down has caused, borrowers are having to contend with loan recovery agents who have resorted to new ways of harassment.
Loan companies are accessing phone book data of their borrowers through mobile apps that they are made to download to apply for the loan. The recovery agents then not only abuse defaulters and their families, but also threaten to send personal pictures to all their contacts. Cyber criminals have always been in search of new modus operandi to target people.
Now, let us return to where we started. Under the weight of the new COVID-19 pandemic, many giants are facing the crisis of failure. Five months of pandemic created enormous debt and tens of thousands of companies went bankrupt. If you have business and your company is still there, and there are no pay cuts or layoffs, please treat your company and customer well. Humans are facing the pandemic that cannot be controlled. The second half of 2020 is the challenge of corporate strength and relationship.
Unemployment claims reached an all-time high of 38+ million, unemployment is over 25 per cent (of 160 million work force, close to 40 million are jobless). With no income, consumer demand is falling drastically and the economy will go into a free fall. This is just the US.
(The writer was a technocrat in the Government of India and a thought leader on eCommerce, eProcurement, eSign, DSCs and Internet Security. A graduate of UBC, Vancouver, Canada, he has written eight books and done United Nations assignments.)