A&O launches Hong Kong Cyber Fraud First Response Tool in response to growing threat of cyber crime
22 October 2020
Allen & Overy’s Hong Kong Litigation team has launched the Hong Kong Cyber Fraud First Response Tool – a free, web-based tool that guides the victims of cyber fraud (or their representatives) through the immediate steps that they should take following the discovery of a fraud where the funds have been remitted to an account in Hong Kong. The tool has been launched to the market at a time when cyber fraud is a growing concern for companies and individuals worldwide, amidst the additional challenges posed by the COVID-19 pandemic and increasing sophistication of cyber criminals.
The volume of cyber fraud attacks worldwide is greater than it has ever been, and Hong Kong is one of the primary destinations for the proceeds of cyber fraud to be transferred to, before the funds are dissipated into accounts elsewhere across the globe. It is estimated that 6.4 billion fake emails are sent globally every day1 resulting in USD26 billion of global losses2 according to the FBI’s international statistics for reported cases. However, the FBI estimates that only 10-12% of cyber frauds are reported so the actual figure is likely to be much higher. This trend has been exacerbated due to the COVID-19 pandemic, which has resulted in an increased risk of cyber fraud attacks by fraudsters seeking to exploit IT system vulnerabilities and take advantage of the physical distance created by remote working.
Allen & Overy has responded to this growing risk by developing a unique tool to assist victims with the initial steps which, if taken swiftly, could increase the prospect of recovery of the misappropriated funds. It is clear that the first 24 to 48 hours after discovering a fraud are critical, and A&O’s tool is designed to guide victims through these first stages.
Whilst victims of fraud can be located anywhere in the world, Hong Kong is one of the most common destinations for misappropriated funds to be sent to. Freezing the funds in the Hong Kong bank account as a matter of urgency is absolutely essential. The A&O tool works by taking the victim through a number of questions about the specific fraud, and results in the creation of a set of documents that can be downloaded and sent to the relevant authorities in Hong Kong as well as the bank that has received the stolen funds requesting that the monies in the account be frozen.
A short video explaining how the tool works is available here.
Partner Matt Bower commented: “The incidence of cyber fraud is on the rise and we expect this trend to continue particularly in light of the recent shift in working patterns resulting from COVID-19 and the increasing sophistication of cyber criminals. We are seeing more and more innovative methods being used by cyber criminals as they take advantage of the current upheaval caused by the pandemic – corporates, individuals and financial institutions in particular must be alive to the risks and act quickly upon discovering a fraud. ”
Of Counsel Emily Tillett added: “Whilst corporates and individuals located anywhere in the world may fall victim to cyber fraud, Hong Kong is one of the primary destinations for the proceeds of cyber fraud to be transferred to before being dissipated to accounts elsewhere around the globe. Many victims will not be aware of the steps they need to take and often too much time passes between discovering the fraud and action being taken. The aim of the Hong Kong Cyber Fraud First Response Tool is to help such victims with those initial steps in order to maximise the chances of recovery of the stolen funds. Initial feedback regarding the tool has been very positive, with a number of (non-legal) practitioners operating in the cyber fraud and investigation space in Hong Kong praising its uniqueness and utility.”
- EY Global Information Security Survey 2-18-2019
- FBI statistics 2019 Alert Number I-091019-PSA