According to the Federal Trade Commission, U.S. consumers have lost $77.4 million because of fraudulent COVID-19 scams this year. Experts believe the figure is likely higher because scams are usually under-reported, particularly right now, as there are “unprecedented” efforts to scam Americans amid the coronavirus outbreak.
John Breyault, the National Consumers League’s VP of public policy and fraud, said: “I think the FTC’s numbers are almost certainly just the tip of the iceberg when it comes to fraud losses. We know fraud is historically an under-reported crime.” The National Consumers League is a nonprofit consumer advocacy group that was founded in 1899.
Schemers have primarily targeted unemployment benefits and stimulus checks, among other federal relief monies. Federal checks went out for $1,200 per individual and $2,400 for couples. Eligible children received $500. This amounted to $262 billion split up over around 160 million payments.
Scammers targeted a portion of those payments by convincing some Americans to fork over personal information. The scams involved tricking people into thinking they’d receive their stimulus checks faster, but scammers often talked consumers into fees to do so or claimed the money themselves.
In all, consumers have made approximately 62,400 claims of fraud. Almost half resulted in some type of financial loss, which averaged $272 for each affected consumer.
Now, there’s a new concern that scammers will leverage news of a possible second stimulus check to rip consumers off once more.
Unemployment benefits have also been a target for thieves. Per the Labor Department, at least 31 million Americans are collecting unemployment payments.
The additional federal money to jobless Americans is easy for some scammers to steal once they get personal information. The criminals pose as helpers who aid in filing for unemployment benefits to obtain the information required to complete their scams.
International organized crime rings are responsible for some of the frauds, which could amount to lucrative sums considering the extra weekly sums of $600 the government issued to unemployed workers through this month.
Another area that’s been susceptible to fraud is the Pandemic Unemployment Assistance program. It’s a novel program for independent contractors and self-employed workers that helps workers certify their unemployment needs. According to the inspector general of the Labor Department, the program is easy to monopolize for dishonest gain.
False claims for COVID-19 treatments and cures have also been the focus of some scams. Scammers will also try to coax money from consumers by threatening to cut off their utilities if they don’t pay up.
Breyault pointed out, “Scammers are seeing this as an unprecedented opportunity to take advantage of consumers, who are not only in dire financial straits but are being inundated with information about COVID cures or protections that are dubious at best and fraudulent at worst.”
But, according to the FTC, online shopping scams were some of the most commonly reported complaints. Many of those involved price gouging for high demand products like bleach and disinfectants.