Security & Fraud

FTC Provides Testimony On Anti-Fraud Efforts Amid Pandemic

The Federal Trade Commission (FTC) testified before the Senate Commerce Subcommittee on Manufacturing, Trade and Consumer Protection on Tuesday (July 21), detailing its efforts to combat coronavirus-related fraud, including sending warning letters and trying to educate customers on how to spot a scam, according to a press release.

The release notes that the Bureau of Consumer Protection Director Andrew Smith was the one who delivered the testimony. Smith outlined the FTC's process of monitoring complaints from consumers and the overall marketplace, looking out for things like fraudulent "cures" for the virus and robocalls and emails about other dubious claims.

The FTC says it has sent over 250 warning letters telling merchants to stop claiming their products will cure, prevent or treat the coronavirus. In many cases, the release says the merchants have complied, but the FTC said it would pursue legal action in other cases where the marketers continue making such claims.

Likewise, the FTC has been issuing warnings about multi-level marketing schemes and Voice over Internet Protocol (VoIP) service providers for reportedly helping to facilitate robocalls and other such scams. Some of them, the release notes, have made claims that might lead others to incorrectly believe the schemes were affiliated with the Small Business Administration (SBA).

The FTC has also been trying to crack down on scams in which users purchase masks, personal protective equipment (PPE) or other items and then never receive them, or receive a product that is different from what was ordered.

To help protect consumers from such scams, the FTC set up a website with alerts of new schemes, consumer report data and law enforcement actions.

Scams have been prolific during the pandemic, with American consumers having lost $77 million to various types of COVID-related fraud, according to PYMNTS. The number is actually likely even worse, according to National Consumers League spokesman John Breyault. He noted that fraud is typically an underreported crime, and there have likely been other cases authorities don't know about.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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