From Birch Gold Group
No crisis is free of those looking to benefit from it, and the current pandemic is no different. As of January 12, the Federal Trade Commission (FTC) received over 324,000 consumer reports involving coronavirus scams, with 69% involving some form of identity theft. Overall, those who fell victim reported losing $307 million total, with a $305 loss on average.
As tends to be the case, the fraudsters are armed with the usual suite of high-tech tools that facilitate phishing, fake social media posts and automated calls. Furthermore, the scammers keep a close eye on the headlines and adjust their scams as news pertaining to the virus roll out.
Phony tests & worthless remedies
“Alternative remedies” scams peddling snake oil are thriving. The Food and Drug Administration as well as the FTC have sent dozens of warnings to companies selling unapproved products as “coronavirus cures” or “pandemic preventers,” or less specifically as immune-system boosters. You might have seen this sort of product advertised on TV, on social media, or heard about them on the radio. Here’s the FTC list of coronavirus scams.
Just to set the record straight: the FDA has yet to approve any tea-based products, essential oils, CBD-infused remedies, intravenous vitamins or colloidal silver as a coronavirus medication.
In addition, the FBI said that con artists have developed their own version of the coronavirus test. This isn’t just to make a quick buck on a bogus product ‑ the fraudsters gather personal information which is later used to scam health insurance companies. There are even schemes involving fraudulent vaccines.
Not all scammers are charging real money for fake products, though.
The coronavirus stimulus scam
With the government rolling out a $900 billion stimulus package, it was only a matter of when, and indeed how, scammers will attempt to defraud citizens of unemployment benefits or stimulus checks.
According to the Better Business Bureau, the stimulus scams have already materialized in the form of promises to expedite the receival of the payment. A scam of this nature can either attempt to get someone to click a malware link, pay a fee to supposedly smoothen the process or part with their personal information in order to confirm something.
The economic downturn has also paved the way for promises of nonexistent relief in various forms, ranging from scammers promising fake government grants to those impersonating banks and lenders. Unusually, small businesses appear to be among the primary targets of these scams due to their hard-hit nature.
Stock scams prey on those stuck at home
The stock market is no different, possibly worse, given the huge influx of first-time investors using zero-fee trading services like RobinHood.
The U.S. Securities and Exchange Commission has warned of claims a specific company’s stock will imminently soar due to a coronavirus-related product. In truth, this is simply a slight variation of the classic pump-and-dump scheme where con artists have loaded up on these companies’ stocks at minimal prices and are looking to hype the product and then sell en masse, leaving investors with massive losses.
Traditionally, pump-and-dump was done through cold-calling. Today’s schemes involve social media screeds, spam emails, and online ads in addition to the stranger on the phone offering you the deal of a lifetime.
That’s not all scammers are using computers for, either…
Pandemic a growing environment for digital viruses, too
More technologically advanced fraudsters have turned to malware as their primary source of gains, a route made that much easier by the increase in the average person’s virtual presence. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said that tens of thousands of new domains related to the virus have been registered in January alone. FinCen maintains a good list of coronavirus scam advisories and alerts.
While virtual scams vary, they generally focus on phishing by impersonating a perceived authority figure and attempt to get the user to either download malware or give up their personal information.
Fake contact tracing ‑ possibly the only pandemic-specific scam
A legitimate contact tracer might contact you out of the blue because you were near someone who was near someone who tested positive for COVID-19. Obviously learning something like that would concern or upset you, and in such a situation you’d be much more likely to click a link, or pay a fee, than you would otherwise.
Scammers know this and capitalize on putting you off your guard with a very serious (and completely false) claim.
Fake contact tracers might cold-call you, or you might receive a text message. Depending on the scam, the messages and calls could include requests for personal information, attempts to get you to click a link or pay a fee.
As the AARP reminds us, “Messages from actual contact tracers working for public health agencies will not include a link, or ask you for money or personal data.”
Knowing what to look out for is key to defending against most scams. To help you detect and avoid financial scams, Birch Gold Group has pulled together an extensive resource guide that is now available on our website. The Birch Gold Group Scam Protection Resource Guide helps you identify warning signs and provides you with tips on how to avoid fraud.