Security & Fraud

Pandemic Scammers Robbed US Consumers Of More Than $77M

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Americans have lost more than $77 million in COVID-19 fraud since the start of the year, according to the Federal Trade Commission (FTC).

But that number misses an unprecedented scope of scams connected to the coronavirus, according to John Breyault, a spokesman for the National Consumers League, the Washington, D.C.-based consumer advocacy group.

“I think the FTC’s numbers are almost certainly just the tip of the iceberg when it comes to fraud losses,” Breyault told CNBC. “We know fraud is historically an under-reported crime.”

Consumers reported 121,466 instances of fraud, the FTC found. The median loss was $270.

The top five scam categories were online shopping, travel and vacation, credit card, financial institutions and text messages, the FTC data said.

As Congress considers a second round of stimulus checks, Breyault told the network cybercriminals are prepared to rip off unwary consumers.

“Scammers are seeing this as an unprecedented opportunity to take advantage of consumers, who are not only in dire financial straits but are being inundated with information about Covid cures or protections that are dubious at best and fraudulent at worst,” he told the cable news station.

With more than 40 million Americans collecting jobless benefits, opportunities are out there for thieves hoping to cash in by posing as individuals helping file for unemployment benefits and then steal personal information, CNBC reported.

The U.S. Department of Justice (DOJ) said it saw evidence of scams starting in April. A cooperative effort between police and businesses has shut down hundreds of websites established to exploit the coronavirus pandemic, according to the DOJ.

Also in April, PYMNTS reported incidences of account takeover increased 347 percent while shipping fraud skyrocketed 391 percent, respectively, from 2018 to 2019, and that was before COVID-19 became a household name.

Greg Firestone, data science vice president at Allstate Corp., the Illinois-based insurance company, said the best offense is a good defense.

“Data is your friend in this regard, [fraud is] a problem that impacts all insurance companies, and we need to focus on it and make sure the fraudsters realize that we’re not easy marks,” he told PYMNTS.

Consumer advocates and law enforcement officials offer several tips for people to avoid being victimized by cybercriminals, including verifying the identity of anyone who contacts them regarding COVID-19, installing anti-malware and anti-virus software, never clicking on links or opening email attachments from unknown sources, and checking the websites and email addresses offering information, products or services related to COVID-19. Scammers often employ addresses that differ slightly from the real ones they are impersonating.

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

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