American Consumers Have Lost $145 Million to Coronavirus Fraud
Americans have lost more than $145 million to fraud related to the coronavirus, according to the Federal Trade Commission, which said it had fielded more than 200,000 complaints from consumers.
Schemes related to the coronavirus peaked in the spring, and they focused on federal stimulus payments and other forms of financial relief, personal protective equipment, and unemployment and other government benefits, the commission reported.
The data was compiled by the commission’s Consumer Sentinel Network, which provides law enforcement agencies and the public with information about rampant forms of fraud. The network’s tracker of coronavirus-related cases includes nearly 206,000 reports of coronavirus-related fraud that were submitted to the F.T.C. from Jan. 1 through Sept. 22.
The median loss was $300, according to data from the commission. The losses could be higher for older Americans, who are often the target of this kind of fraud, said Lucy Baker, a consumer defense associate at the United States Public Interest Research Group, which shared the data this week. Many of the victims were older, she said.
“I’m not shocked that scams have been on the rise,” Ms. Baker said. “Scammers love natural disasters, especially in this environment where everyone is vulnerable.”
In the months since the pandemic began, government agencies have warned consumers about fraud in which victims are asked for personal data, such as their name, date of birth, Social Security number or Medicare and health insurance information. This information can be used to commit identity theft or medical insurance fraud.
The commission accelerated its action against coronavirus fraud in March, when it joined the Food and Drug Administration in issuing warnings related to the virus, telling seven companies to stop selling products that claimed to cure or prevent Covid-19, the disease caused by the virus.
Many frauds also sought cash and personal information from consumers. The F.B.I. issued a warning in June when scammers were advertising fraudulent coronavirus antibody tests.
The number of reports of fraud has declined since the spring, the data shows.
There is often an increase in fraudulent activity after disease outbreaks and natural disasters such as wildfires and hurricanes. Suspected fraud or fraudulent activity can be reported to the National Center for Disaster Fraud.
Charity Navigator and GuideStar, which rate nonprofits based on their effectiveness and financial condition, can also help consumers evaluate whether a solicitation of a charitable donation is legitimate.
Many scammers posed as sources of coronavirus stimulus relief or even marketed a cure or preventive treatment for Covid-19. They were crafty, experts said, sending out robocalls, text messages and emails to consumers.
“Scammers are always going to go for your last dollar, no matter what,” Ms. Baker said.
During a pandemic or natural disaster, consumers will move into “flight-or-fight mode,” said Stacey Wood, a psychology professor at Scripps College in California who studies consumer fraud. Increased stress can cause people to make more impulsive decisions, she said, rather than stopping to think about whether they should avoid clicking a link in a phishing email.
As a disaster persists, scammers will adopt new tactics and approaches, Professor Wood said.
The coronavirus has driven fraudulent behavior to levels she said she had never seen before. The duration of the pandemic and everything that comes with it — financial worries, loneliness and isolation, even depression — have created psychological vulnerabilities that may not be as widespread even in the aftermath of disasters like hurricanes or wildfires, she said.
“Disruption and fast-moving events create good conditions to target consumers,” Professor Wood said.
To avoid fraud, AARP has recommended that consumers avoid sites promising coronavirus-related vaccines or cures. They should also be wary of emails, calls or social media posts advertising coronavirus tests, or claiming to be raising money for victims or research, and those that ask them to share personal information.
The organization also urged people not to click links or download things they see in unsolicited emails or text messages.