Pandemic Financial Scams

• Older adults and young adults are more likely to be scammed than other age groups, in part because they are targeted by scammers more often.
• Living each day with the knowledge that a deadly virus is active in the community can lead to anxiety and a feeling of helplessness. Unfortunately, these feelings of fear and vulnerability can also make people more susceptible to falling for scams.
• Telephone scams have become more common thanks to autodialing and caller-masking technologies. However, online channels like email, social media and even online dating apps are prime platforms for scammers.

• Studies show that older people lose as much as $36 billion each year from financial exploitation.
• In 2017, the Federal Trade Commission reported 40% of Americans in their 20s who reported fraud said they lost money because of it — more than any other age group.
• Currently, one in ten adults fall victim to fraud each year in the United States, and the majority of fraud occurs online.

• Legitimate lenders will do a thorough check on your credit score and repayment history to determine if you’re a good fit for a mortgage or a refinance loan. If they don’t consider your ability to pay or don’t care about your credit, you’re probably not dealing with a legitimate lender.

You should also avoid anyone who approaches you under the following circumstances:

• They want a fee in advance to “work with your lender” to modify your loan
• They guarantee they can stop a foreclosure or lower your rates.
• They want you to stop paying your mortgage entirely and only pay them.
• They say they are affiliated with the government but have no credentials.
• They require you to release personal information as a stipulation for services.
• There is no evidence of them online or on third-party review sites.

If you run into any of these circumstances, focus on protecting your mortgage by not engaging with the “company” offering you the deal.

• The most obvious investment scams are of the “get rich quick” variety. These are relatively easy to spot because they sound too good to be true, and they often come with bogus money-back guarantees. You may receive a phone call, an email or even an ad promising you exponential returns for a small initial investment, only to find out later that the promises were false.
• Subtler scammers may offer you an “insider” deal, claiming they have special knowledge of a specific stock that nobody else does. They may even offer you inside information for a small fee.
• In the current context, you can expect scammers to say they have inside knowledge of treatments or products that “cure the coronavirus,” which could lead to high returns if you invest immediately. These types of scams are often broadcast across social media and the internet.
• Fast money scams involve a scammer dealing with transferring money in and out of your account. Some of the most common signs of this scam include:
  • They want you to wire or transfer money.
  • They approached you online or out of nowhere.
  • They use threats or hyperbolic language to play with your emotions.
  • They’re linked to an unsecured website.
  • Their emails don’t look official.

• Taking care of your mental health during this time will also make you less susceptible to financial scams.
• Never disclose sensitive information to anyone who contacts you by phone or email.
• Set up two-factor authentication on any accounts that have a login.
• Regularly check your credit report for fraud.

• If you believe you have been scammed during the COVID-19 pandemic already, don’t panic. There are steps you can take now to recover your identity and reduce the chances of significant financial loss.

  First, you should stop all contact with the scammer. Next, contact your financial institutions. Even if you only surrendered your personal information, scammers may try to target your financial accounts. If you sent money through a service like PayPal or Venmo, you should contact them as well.

  Then, change all your passwords to newer, more complex ones. You can use a password keeper to keep track of them all, but the safest method is always writing them down. Start with the email address you have listed in your most crucial accounts. Once a fraudster gets access to your email, they can use it to request password resets on your other accounts.

  Finally, report the scam to the authorities. You can start with your state’s Consumer Protection Office, then you can contact one or some of the following organizations:

  •  FINRA Investor Complaint Center – Investment scams
  •  The FBI – Financial crimes involving high dollar mounts
  • The U.S. Securities and Exchange Commission (SEC) – Securities fraud    
  • The Federal Fraud Enforcement Task Force (FFETF)  – Fraud committed by companies and their employees
  • The Internet Crime Complaint Center (IC3) – Internet fraud
  • Econsumer.gov – International scams