Another Pestilence To Contend With: Financial ScamsSubmitted by WWA Planning & Investments on April 16th, 2020
Tricksters abound in times of crisis. They are opportunistic and clever. As the COVID-19 outbreak advances, so do their efforts. According to the FBI, scammers and fraud perpetrators “see a vulnerable population out there that they can prey upon. People are scared and looking for help. People are trying to protect themselves and their families. For example, people are looking for medical attention and medical equipment. They also may be unemployed and looking for work. There may be an extra level of desperation right now that may cause someone to make an emotional decision that could make them a victim.”
Common scams are based on phony cures, suspect test kits, non-existent vaccines and government impersonations tied to either the upcoming stimulus payment or the U.S. Census.
One of the threats the FBI is most concerned about relates to fraudulent cures and medical equipment. The FBI says “these ‘cures’ can be extremely dangerous to your health—even fatal. You should never accept a medical treatment or virus test from anyone other than your doctor, pharmacist or local health department.”
With unemployment rates high, work-from-home frauds are gaining traction. In reading about this type of scam, I came across a term I had not heard before: “money mule.” The FBI defines a money mule as “a person who transfers illegally acquired money on behalf of or at the direction of another. Money mules often receive a commission for the service or provide assistance because they believe they have a trusting or romantic relationship with the individual who is asking for help.” It seems like a harmless way to earn a little extra money, but it is in fact a felony.
Another scheme rearing up is investment fraud. Criminals will dangle an opportunity to invest in a company they say is on the verge of finding a cure, and if you get in now you will make a fortune.
One type of investment that’s not necessarily illegal but that you should be suspect of is an annuity. Annuities can be helpful in a portfolio, but you need to understand the fine print.
We are a trusting society, and Americans often wish to be helpful. Unfortunately, that can make us susceptible to being exploited. The AARP compiled the following tips to avoid coronavirus scams from the Federal Trade Commission, Federal Communications Commission and the Securities and Exchange Commission:
◗ Avoid online offers for coronavirus-related vaccines or cures; they aren’t legitimate.
◗ Don’t click on links or download files from unexpected emails, even if you think you recognize the email address. Ditto for text messages and unfamiliar websites.
◗ Don’t share personal information such as Social Security, Medicare and credit card numbers in response to an unsolicited call, text or email
◗ Be wary of fundraising calls or emails seeking money for coronavirus victims or disease research, especially if you are pressured to act fast and to pay by prepaid debit cards or gift cards.
◗ Ignore phone calls or emails from strangers urging you to invest in a hot new coronavirus stock.
If you are contacted by a scammer or have fallen victim to one, you can report the incident and find other resources at usa.gov/stop-scams-frauds.
You also can report suspicious activity to the FBI’s Internet Crime Complaint Center, ic3.gov.
Another interesting site is fcc.gov/covid-scams. The FCC has sample audio recordings that demonstrate how convincing scammers can be.
In this time of fear, uncertainty and, in some cases, desperation, it can be tempting to believe someone promising protection, a cure or a financial windfall. Take the time to stop and think about what you are being promised. If it sounds too good to be true, it probably is.