The coronavirus pandemic has left millions without jobs and caused severe financial loss for many families and businesses across the country. Unfortunately, what most people see as a crisis, other unscrupulous individuals see as an opportunity to defraud consumers and the government. (Let’s just say it’s unlikely you’ll hear the words ‘empathy’ and ‘fraudster’ in the same sentence.)
The Federal Trade Commission (FTC) recently announced that over $145 million has been lost to coronavirus related fraud. Additionally, the agency has received more than 200,000 complaint forms from consumers claiming to be victims of fraud. (It seems fraudsters have been busier than ever trying to come up with new ways to defraud people during the pandemic.)
The Consumer Sentinel Network, which provides law enforcement agencies and the public with information about the most common kinds of fraud, compiled a report for the FTC citing approximately 206,000 reports of fraud. These instances included identity theft, spam telephone calls and other coronavirus fraud complaints submitted from January 1 through September 22 of this year. The report addresses complaints across all aspects of consumer’s lives including, but not limited to, shopping, health, debt, travel, etc.
The median loss for consumers who fell victim to a coronavirus related fraud is $300. Older adults usually lose more money because they tend to more easily fall victim to phishing scams. (Fraudsters identify the easiest targets to exploit. Unfortunately, older Americans are more vulnerable and are an easy target.)
The majority of coronavirus schemes seek to fraudulently obtain federal stimulus payments and loans intended to provide financial relief to businesses. Other fraudulent schemes are related to the sale of personal protection equipment and an increase in false applications for unemployment benefits. (The commonality between these schemes? They take advantage of the fear incited by the pandemic.)
The government continues to warn consumers about the increase in scams, such as phishing emails and calls that ask for personal identification information like name, date of birth, Social Security number, or healthcare information. If this personal information is obtained, fraudsters can apply for insurance benefits or loans using your stolen identity. (In other words, they’ll have a hey day with your identity and leave you penniless.)
The FTC is not the only agency working to address coronavirus-related frauds. The Food and Drug Administration has issued warnings to consumers citing several companies that have falsely claimed to have products that can cure or prevent COVID-19. The AARP has also released warnings which advise older consumers to avoid websites, emails, calls, and social media offering free coronavirus testing or promising a vaccine. They should also be wary of solicitations for donations towards vaccine research. (Fraudsters prey on the desperation of people who are just trying to keep themselves safe.)
There are a few recommended programs that let consumers know whether a nonprofit is legitimate or not, and if they should feel safe donating to that organization. Both Charity Navigator and GuideStar assess nonprofit organizations and inform consumers about their business practices.
If you think you are a victim of a COVID-19 scam, report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or by submitting a NCDF Web Complaint Form.
Today’s Fraud of the Day comes from an article, “Americans Have Lost $145 Million to Coronavirus Fraud,” published by The New York Times on September 23, 2020.
Americans have lost more than $145 million to fraud related to the coronavirus, according to the Federal Trade Commission, which said it had fielded more than 200,000 complaints from consumers.
Schemes related to the coronavirus peaked in the spring, and they focused on federal stimulus payments and other forms of financial relief, personal protective equipment, and unemployment and other government benefits, the commission reported.