Keep Your Guard Up Against COVID Wrongdoers

Whenever a major news item affecting lots of people breaks, one thing is almost sure to follow: scams. Wrongdoers often see crises as opportunities—chances to prey on society’s high emotional pitch. COVID-19 is no exception. Back in April, we pointed out some then-common ploys. But now, with time and the crisis’s continued evolution, more are emerging. According to Federal Trade Commission (FTC) data, nefarious activity is fairly widespread, with almost 92,000 reported cases as of June 11, which the FTC estimates have cost Americans almost $60 million. Here is a quick rundown of the new methods criminals seem to be employing to help you stay attuned—and on guard.

Phony Contact Tracing

In what seems mostly like a twist on the old IRS scam (which itself was a twist on the Social Security fraud, and so on), it seems some wrongdoers are now trying to capitalize on contact tracing. Our guess is they see opportunity in this given three convenient factors for them: Contact tracing methods aren’t well known by the public; by definition, contact tracers must reach out on an unsolicited basis to individuals they suspect have had contact with someone suffering from COVID; and, finally, getting a call from a contact tracer would likely raise fear among the recipients.

The contact trace aspect of this ploy is about the only unique part. There are two general means: phone call and texting. On the phone call side, the perps want you to give them your Social Security number, bank account information or similar. If that seems strange given that contact tracers’ aim is to follow your connection to people infected with a virus, well, it is. A real contact tracer wouldn’t ask for any of this information. But most of these scams operate by getting folks’ emotions up, guard down and then extracting information these people would otherwise be very unlikely to surrender.

The text version is somewhat different. They send you a message that goes a little like this: “Someone you know has tested positive for COVID-19” and then instructs you to click an embedded link for instructions. That link installs nefarious malware on your phone. If you get such a text, don’t click the link! 

These are two very fast-growing schemes presently. The Federal Trade Commission and several different government agencies have warned consumers repeatedly of this in recent weeks. Take heed!

Fraudulent Unemployment Benefits Filings

Another common scheme cropping up lately: Perpetrators falsely filing for unemployment insurance benefits in your name. Here, too, the cause is clear enough. Tragically, millions of Americans are newly out of work. Many states’ unemployment offices have been overrun with filings. No shock, then, that fraudsters possessing a bit of personal information have stepped in, filing claims for unemployment insurance in other peoples’ names—even those who aren’t laid off.

The issue here is partly the fact this drains funds from states that could use them to benefit the unemployed. But, importantly, this also amounts to identity fraud—and it suggests a wrongdoer has their hands on at least some relevant data. One victim of the fraud, who happened to contact Seattle media in May, noted they were also a victim of the huge 2017 Equifax hack. If you have been subject to this or other similar events, you are at higher risk of falling prey to this scheme.

So if you get a letter from your state’s employment office confirming a benefits filing you never submitted, there are a few steps to consider taking.

1. Report it to your state’s employment office. This listing from the US Department of Labor has every state’s contact information.
2. If you are employed, notify your employer.
3. File a police report on the non-emergency line.
4. Check your credit reports. You may wish to consider freezing your credit, if you haven’t already. You may also wish to alert at least one credit bureau of the identity theft.

Update on Investment-Related Schemes

Back in April, we cautioned readers an uptick in various types of securities schemes would likely come. Sadly, that seems to have happened. From the SEC to the North American Securities Administrators’ Association (NASAA, a body comprising state and provincial regulators from the US and Canada), reports are pouring in of just that. The NASAA recently announced it had uncovered 91 separate potentially fraudulent activities. In recent written testimony submitted to the House Financial Services committee, Alabama Securities Commission Chief Deputy Director Amanda Senn laid out a few examples:

• Ne’er-do-wells hyping pooled investment schemes in cryptocurrency
• Advertisements and securities offers on social media platforms like Craigslist
• Folks touting schemes to allegedly generate income for trading volatility in the oil and stock markets, with “guaranteed returns”

The upshot of most of these: They claim to offer high returns, in some cases even beyond what the equity markets offer, with no risk. Nothing can offer that. It amounts to marrying capital preservation and growth—an impossibility, as true capital preservation means never putting principal at any risk of loss. As a general rule, if an offer sounds too good to be true, it probably is. So be a skeptic. It may be your best defense of all.