According to the Federal Trade Commission (FTC), approximately 327,000 Americans filed a fraudulent complaint related to the pandemic from January 1, 2020, through July 8, 2021. In all, the fraud victims lost $488 million, with senior citizens accounting for the majority of the victims suffering the greatest financial losses. However, some experts believe that actual fraud losses could be higher since the figure only includes those reported to the FTC.
The average loss was about $366. The majority of the scams came from stimulus funds, travel, and online shopping activities. Travel fraud resulted in the most significant losses from fraud and amounted to $77 million.
Travel has now become popular again as the COVID vaccination program has been underway. The Better Business Bureau said scammers have reacted by posting fake customer service numbers for consumers to seek refunds or ask for a cancellation. They’ve also created fake booking sites that collect financial information, ripping people off in the process. The Bureau said fraudulent sites pretend to find cheap airline tickets for customers, who are then asked to provide their credit card information.
The FTC said the newest scam risk is related to the child tax credit. Authorities are warning that thieves will attempt to cheat qualifying families out of their advance monthly payment of the child tax credit, which begins July 15. A scammer might pose as a government agency pretending to help someone gain access to federal assistance. The child tax credit is worth up to $300 per kid during each qualifying month, and thieves are doing all they can to get their hands on it.
One consumer education specialist from the FTC named Lisa Lake warned, “When money from the government is in the news, we know scammers are about to run their standard playbook. They may call, email, text, or DM you. They’ll say they can help you get your payments earlier (they can’t), get you more money (also no), or tell you other lies…”
But the agency warns that payments can only be sent by the IRS. Any person claiming that they can help is most likely a criminal, according to Lake. The government doesn’t make contact through a direct message or ask for money or personal information, such as a social security number, credit card information, or bank account numbers.
While seniors were scammed less than other age groups, the losses they suffered were nearly threefold those of younger victims. Seniors over 80 lost an average of $1,000 to fraudulent activities.
Most of the reports involved online shopping frauds, which accounted for 16 percent of the total fraud reports. There were 53,000 complaints in all related to online shopping. Americans have been more vulnerable during the pandemic to fraud due to online shopping because they spent much of their time online as they were shuttered inside. Many were also victims of “opportunistic websites” that claimed to sell trending items. Consumers would place orders for items such as clothes, electronics, and more but never get the things they ordered.
The Bureau suggests that any website should be researched and verified before providing financial information.