Fraud based on trusted data
The profession of a fraudster is very demanding in terms of competition: in order to stay afloat and be cost-effective, poor fellows must follow trends and quickly respond to changes. Tomorrow they will start issuing loans somewhere for the development of agriculture – quickly collect cattle from your neighbors and get a loan for the suddenly increased number of livestock. The day after tomorrow, scammers will urgently run to study foreign languages and take out loans from gullible banks for this purpose. And as you know, only cowards pay back loans.
You can fight credit scammers through careful analysis and double-checking of user information. But sometimes, with the help of specially generated “valid data”, fraud is carried out. Today I will tell you interesting cases that we caught in Uzbekistan.
A little historical background.
The electronic government of the Republic of Uzbekistan rests on three pillars: a portal of interactive government services, a unified identification system and an interdepartmental integration platform (IIP). In simple analogies, an SIP is an Enterprise Service Bus on a national scale, to which dozens of bases and hundreds of services of government agencies are connected. Through the MIP, the systems of recipient government agencies request the required information online using standard protocols. End users are spared the hassle of running around for help; all the necessary information can be obtained automatically. Every day MIP processes millions of requests.
A well-functioning tool becomes interesting to business – business wants to receive up-to-date data and is sometimes willing to pay for it. In September 2022, a resolution of the Cabinet of Ministers was adopted, which allowed commercial organizations to receive information from central databases. Naturally, taking into account the requirements of the legislation on personal data, information security requirements and several other by-laws. The main consumers of the services were banks and commercial organizations, which for the first time had the opportunity to create scoring based on online data. In the competition, banks were preparing more and more delicious offers, and now in Uzbekistan there is simply an explosive growth in the issuance of online loans and microloans through mobile applications (for example, a website with comparative tables of loans from different banks).
Scheme 1: Are you working?
The first scoring models were simple. A user could receive a significant score only because he is employed. If the applicant works, then he is a priori an honest person and can be made happy with a microloan.
Fraudsters quickly understood the logic of scoring and launched the service “Microloan as a service” The future victim is going about some of his sacrificial affairs, in the passage he meets a certain suspicious person who conspiratorially whispers “psst, kid, do you want to earn money?” After some persuasion, they go into an inconspicuous little room, the person is quickly registered for work in a shell company, just as quickly they go through all the necessary identification and checks, and profit: the lucky owner receives a microloan. 50% of the microloan is immediately transferred to a suspicious person for services, and the remaining money is spent by the unwitting accomplice on his own needs. And he enjoys life until it turns out that the microloans still need to be repaid, and the shell company has already closed.
Our maximum online microloan amount is limited to 50 million soums (just under $4,000). As a rule, with the first microloan, the amounts approved are significantly less, but this is enough for the scammers to live a comfortable life.
Scheme 2: Are you paying a pension?
When banks faced obvious problems, analysts began to frantically think about how else to assess the solvency of a potential borrower.
One of the indirect ways to assess the applicant’s financial condition is his pension contributions. According to local legislation, mandatory pension contributions amount to 0.1% of total income. According to the same legislation, the maximum amount of voluntary pension contributions is not limited. The future fraudster gets a job (real or not quite real) with a conditional salary of $50. In parallel with this, the fraudster voluntarily contributes the amount of his earnings to the pension fund. After 3-4 months, the scammer goes to his favorite bank and, cranking up his acting skills to the maximum, says to the employee – “Look carefully, man! You see how big my pension is, but can you imagine what my salary is?” The bank employee takes a calculator and, according to his understanding of the law, calculates the applicant’s salary. After which he happily issues a loan or microloan to a respected person with a monthly income of $50,000. And then, for some reason, the issued loan is not returned.
This scheme can be expanded with the “microloan as a service” service for a third-party victim and the inclusion of a familiar bank employee in the scheme.
Scheme 3: Do you receive a salary?
After “closing up shop” with pensions, the scammers did not grieve for long; new schemes appeared. One of them is interesting because it uses completely legal methods:
the user gets a “leftist” position in an equally “leftist” company.
The company submits a salary slip to the tax committee, and the fraudster’s pay slip shows a huge salary.
With these numbers, which are confirmed by a request to the central database, the fraudster again goes to his favorite bank and takes out a loan “at a high salary.”
a few days later, the company, saying “sorry, we made a slight mistake,” recalls the previous one and submits an updated salary slip, in which the fraudster’s salary is much closer to reality. And the loan has already been issued.
The described cases no longer work in many ways; banks include additional checks and double-checks in scoring. The Central Bank is fighting fraud, tightening requirements for loan issuance and user identification. But we're looking forward to seeing what the scammers come up with this time.
PS. The article did not specifically consider typical schemes like “the security service is calling you, tell me the code” or “we launder a homeless person, give him a bottle of vodka so that he provides his passport details and receives a loan.” The described schemes are based on data that the bank trusts and should trust.
P.P.S. All written amounts are given in dollar equivalent, solely for understanding the scale.
