Protecting Yourself Against Pandemic Scams
This past year, scam artists have taken advantage of people’s concerns over the coronavirus pandemic to defraud them of money. According to the Federal Trade Commission (FTC), consumers reported losing more than $3.3 billion to fraud in 2020, up from $1.8 billion in 2019.1
To help members stay vigilant, here are some of the latest fraud, identity theft, and other scams we want you to watch out for.
Fraudulent Products and Vaccine Scams
The Federal Trade Commission has warned about scam artists attempting to sell fraudulent products that claim to treat, prevent or diagnose COVID-19.
With the arrival of new COVID-19 vaccines, the FTC is warning consumers to also be wary of possible vaccine scams. The FTC is urging consumers to contact their state or local health department in order to find out how, when and where to get a COVID-19 vaccine. In addition, the FTC warned consumers to avoid scammers who:
- Offer to put your name on a vaccine list or get early access to a vaccine for a fee
- Call, text or email you about the vaccine and ask for financial information
For three years running, people have reported losing more money on romance scams than on any other fraud type. There are a lot of people looking for love and fraudsters know it and are targeting them with fraudulent online dating profiles.
Here’s how it works: Scammers get to know you and gain your trust, then start asking for financial help. This can be in the form of gift cards, personal bank account information, or online banking credentials. This can result in large overdrafts or going considerably over your credit card limit.
What many of the largest reported dollar losses have in common is that people believe their new partner has actually sent them a large sum of money. Scammers claim to have sent money for a cooked-up reason, and then have a detailed story about why the money needs to be sent back to them or on to someone else. Don’t fall for it!
So how can you play it safe while looking for love online? Here are some tips to help you steer clear of scammers:
- Never send money or gifts to someone you haven’t met in person – even if they send you money first.
- Talk to someone you trust about this new love interest. It can be easy to miss things that don’t add up. So pay attention if your friends or family are concerned.
- Take it slowly. Ask questions and look for inconsistent answers.
- Try a reverse-image search of the profile pictures. If they’re associated with another name or with details that don’t match up, it’s a scam.
- Learn more at ftc.gov/romancescams.
Unemployment Benefit Scams
According to the U.S. Department of Labor, there has been a surge in identity theft related to unemployment insurance claims. In fact, over $5 billion in potentially fraudulent unemployment claims were paid between March and October of 2020. 2
Typically, these types of scams involve a fraudster trying to use your personal information to claim unemployment benefits. If you receive an unexpected prepaid card for unemployment benefits, see an unexpected deposit from your state in your bank account, or receive a Form 1099-G for 2020 unemployment compensation that you did not apply for, report it to your state unemployment insurance office as soon as possible.
Student Loan Forgiveness Scams
There are more than 44 million student loan borrowers in the U.S., and the country’s total outstanding loan balance is expected to exceed $2 trillion by 2022. The average student loan balance is around $30,000, up from $10,000 in the early 1990s, with many borrowers owing $100,000 or more. The average bill is $400 a month, according to higher education expert Mark Kantrowitz.
For fraudsters, this is all an opportunity.
The scammers usually promise borrowers student debt forgiveness and lower payments. They often request upfront fees for up to thousands of dollars for this “service,” which is illegal.
Never respond to requests to share your federal student ID, except form your ser4vgicer or the government. In addition, be wary of any promises of “immediate” cancelation of your student debt.
If you suspect you’ve been tricked by one of these companies, you should contact your lender or servicer and let them know what happened. You can also file a complaint with the CFPB.
Economic Impact Payment Scams
Scammers have come up with a number of schemes related to the economic impact payments sent to taxpayers by the federal government. It is important to note that at this time, all first and second economic impact payments have already been sent out. A third economic impact payment may be sent out to taxpayers by mid-March.
The IRS is warning taxpayers to be aware of scammers who:
- Use words such as “stimulus check” or “stimulus payment” instead of the official term, “economic impact payment”
- Ask you to “sign up” for your economic impact payment check
- Contact you by phone, email, text or social media for verification of personal and/or banking information to receive or speed up your economic impact payment
In most cases, the IRS will deposit economic impact payments directly into accounts that taxpayers previously provided on their tax returns. If the IRS does not have a taxpayer’s direct-deposit information, a check or prepaid debit card will be mailed to the taxpayer’s address on file with the IRS. For more information visit irs.gov.
Protecting Yourself Year-Round
Remember these top tips from the Federal Trade Commission to avoid coronavirus scams and you’ll be prepared to keep your information safe:
- Learn how to tell the difference between a real contact tracer and a scammer. Legitimate tracers need health information, not money or personal financial information.
- Don’t respond to texts, emails or calls about checks from the government. Here’s what you need to know.
- Ignore offers for vaccinations and home test kits. Scammers are selling products to treat or prevent COVID-19 without proof that they work.
- Be wary of ads for test kits. Most test kits being advertised have not been approved by the FDA, and aren’t necessarily accurate.
- Hang up on robocalls. Scammers are using illegal robocalls to pitch everything from low-priced health insurance to work-at-home schemes.
- Watch for emails claiming to be from the CDC or WHO. Use sites like coronavirus.gov and usa.gov/coronavirus to get the latest information. And don’t click on links from sources you don’t know.
- Do your homework when it comes to donations. Never donate in cash, by gift card, or by wiring money.
- Don’t click on suspicious or unfamiliar links in emails, text messages or instant messaging services — visit government websites directly for important information.
- When you see a link in your email, you can mouse-over it (don’t click it!) and see where it is really pointing to on the web.
- Don’t answer a phone call if you don’t recognize the phone number — instead, let it go to voicemail and check later to verify the caller.
- Keep device and security software up-to-date, maintain strong passwords and use multi-factor authentication.
- Never share personal or financial information via email, text message or over the phone.
- If you see a scam, be sure to report it to the FTC at ftc.gov, the Treasury Inspector General for Tax Administration (TIGTA) at tigta.gov and your local police department
1Federal Trade Commission, February 2021
2U.S. Department of Labor, February 2021