ACFCS COVID-19 Pandemic Coverage: As fraud complaints soar, FTC offers tips, new resource in ‘Scam Bingo’ game

The Skinny:

  • The U.S. Federal Trade Commission (FTC) has seen fraud complaints tied to the coronavirus pandemic soar in recent weeks, bilking victims out of nearly $5 million so far in 2020.
  • States including California, Florida and New York are getting hit particularly hard by scam calls and other phishing, vishing and COVID-19-related frauds, according to FTC complaint data.
  • The frauds have become so prevalent, and unfortunately commonplace, the FTC has created a “Scam Bingo Card,” it is hoping will help arm the country against fraudsters and provide a chance for victims, and potential victims, to share war stories.
  • Going on the offense, in recent months, the FTC has also sent warning letters to dozens of VoIP providers, telling them to stop providing services to scammers – or get blocked from operating.

To counter a surge in spam, scam and fraud calls related to the COVID-19 global pandemic, bilking consumers out of nearly $5 million, the Federal Trade Commission has reacted defensively, by providing tips to counter fraudsters, including a whimsical “Scam Bingo Card” and has gone on the offensive by warning dozens of firms to not be a portal for scam fusillades – or else. 

By Brian Monroe
bmonroe@acfcs.org
April 5, 2020

The challenges for financial crime compliance professionals to protect their institutions, and their customers, are only rising as fraudsters, scammers and hackers try to take advantage of the fear and uncertainty of a still-expanding global pandemic, according to a top government agency.

Since the beginning of the year, the U.S. Federal Trade Commission (FTC) has received nearly 8,000 complaints from consumers about COVID-19 related scams, with consumers stating they have lost almost $5 million – a median loss of just under $600 per person.

The FTC is also cognizant more people could be targets as they are working from home and may be more willing during the Coronavirus outbreak “for the first time in a long time, [to answer] calls from unfamiliar phone numbers.”

The problem is it might be “your colleague’s cell phone…or it might be a robocaller or scammer,” the agency stated in a missive revealing a new, more lighthearted resource highlighting that the frauds related to the coronavirus have gotten so bad and prevalent, officials have created a “Scam Bingo Card.”

To read the full FTC story about the bingo card, click here.

Between January 1 and April 2, the top categories of coronavirus-related fraud complaints include “travel and vacation related reports about cancellations and refunds, reports about problems with online shopping, mobile texting scams, and government and business imposter scams,” according to the FTC.

Where fraudsters are pointing their resources are also vital data points for financial crime professionals as they can weave those details into updated regional risk rankings, better sensitizing transaction monitoring systems to produce alerts on trending scam patterns.

Overall, since January, the FTC has received more than 7,800 coronavirus-related reports from consumers, double what they were just a week prior, the agency stated March 31. To read the full FTC report, click here.

In fraud complaints that mentioned the coronavirus, consumers reported losing a total of $4.77 million, with a reported median loss of $598.

COVID-19 scams ‘are growing’ says FTC

“Scams related to the Coronavirus are growing,” according to the FTC, adding that the scams can come in a variety of forms, noted in the bingo card, including:

  • Refried refi: Some scammers are promising that you can refinance your mortgage.
  • Debt redoubt: Get student loan debt forgiveness – for a fee, of course.
  • Social phishing: You might spot phishing scams, where scammers try to get your Social Security number (SSN) or other financial information.
  • Snake oil cures: Scammers will guarantee you access to a COVID-19 vaccine (remember: there’s still no vaccine, so definitely no access).
  • Medi(don’t)care: They might say they’re from Medicare (they’re not) with a health kit, from the CDC (again, not) with a vaccine kit.
  • Numbers game: They will say they are from the Social Security Administration (nope), telling you there’s a problem with your SSN (there’s not).
  • Lights out: Some scammers might even still be running some of their go-to favorites: tech support, utilities, or lower-your-interest-rate scams.

The FTC is urging potential victims – now COVID-19 fraud bingo players – to print out or save this bingo card and share it on social media (#FTCScamBingo).

The game, while adding a bit of levity, is a way to tackle a very serious subject.

The FTC stated the bingo card is a “way you can spot some of those scam calls you might be getting. And it’s a way to spread the word to help protect others in your community. Check off the scammers you spotted, along with the steps you took to stop them.”

The novel coronavirus, first identified in Wuhan China in December, has in recent months leapt across international borders and cemented itself in anchor points in Italy, Spain and now the jurisdiction with the most confirmed cases: The United States.

Global cases are nearing 1.1 million with more than 59,000 deaths, according to Worldometers.

The United States currently has the most COVID-19 cases in the world, more than 277,000, which is double Italy at just under 120,000 and Spain, which is nearly equal to Italy at a little more than 119,000.

Not surprisingly, as the economy founders and the pandemic takes lives and life savings, regulatory, investigative and watchdog bodies the world over have called on banks – some that have seen anti-money laundering (AML) teams scattered to the wind and laid off – to soldier on by prioritizing certain cases and preparing for a surge in frauds and cyberattacks.

As fraud complaints surge in California, Florida, stimulus scams on the horizon

Fraudsters also now potentially have a new arrow in their quiver: the just-passed economic stimulus initiative.

The expansive $2 trillion package has tethers to AML requirements because financial institutions must typically engage in certain identity, and likely risk, verification requirements before loaning money – but the bureau is allowing banks to rely on customer information previously captured under original fincrime compliance checks.

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has touched on the recent upswing in frauds related to the coronavirus and as well has stated it is “committed to promoting the success of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), including the need to facilitate expeditious disbursal of CARES Act funds,” according to the latest statement. 

But as full sectors of the economy, and regions, are rocked by death, disease and an uncertain economic future, fraudsters are not letting up.

Some states that have already been hit hard by the coronavirus – physically and fiscally – are also ground zeroes for fraudsters, an ignoble irony as those who have suffered so much already have enemies at the virtual gates trying to take what little they have left. 

To read the full FTC COVID-19 complaints report, click here

The top five states for FTC complaints related to COVID-19 related scams:

 

               California      1,227

               Florida           686

               Texas             624

               New York       591

               New Jersey   305

How to keep a scammer at bay? Fight fire with facts, fast fingers, think before you link

While fraudsters may seem like they have an endless array of tools and platforms – email, phone call, text – there are some common tactics individuals can employ to better prevent being scammed, including speedy hang-ups, taking a more skeptical approach to online sellers not clicking on links you were not expecting – even if they look to be from a government agency offering COVID-19 tips, resources or stimulus checks.

Here are some tips to help you keep the scammers at bay:

  • Hang up on robocalls: Don’t press any numbers. Scammers are using illegal robocalls to pitch everything from scam Coronavirus treatments to work-at-home schemes. The recording might say that pressing a number will let you speak to a live operator or remove you from their call list, but it might lead to more robocalls, instead.
  • Ignore online offers for vaccinations, home test kits: Scammers are trying to get you to buy products that aren’t proven to treat or prevent the Coronavirus disease 2019 (COVID-19) — online or in stores. At this time, there also are no FDA-authorized home test kits for the Coronavirus. Visit the FDA to learn more.
  • Fact-check information: Scammers, and sometimes well-meaning people, share information that hasn’t been verified. Before you pass on any messages, contact trusted sources. Visit What the U.S. Government is Doing for links to federal, state and local government agencies.
  • Know who you’re buying from: Online sellers may claim to have in-demand products, like cleaning, household, and health and medical supplies when, in fact, they don’t.
  • Don’t respond to unexpected or unknown texts and emails: Particularly if they are about checks from the government. The details are still being worked out. Anyone who tells you they can get you the money now is a scammer.
  • Think before you link in your email or online: Don’t click on links from sources you don’t know. They could download viruses onto your computer or device.
  • Unofficial official sources: Watch for emails claiming to be from the Centers for Disease Control and Prevention (CDC) or experts saying they have information about the virus. For the most up-to-date information about the Coronavirus, visit the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO).
  • Charity chicanery: Do your homework when it comes to donations, whether through charities or crowdfunding sites. Don’t let anyone rush you into making a donation. If someone wants donations in cash, by gift card, or by wiring money, don’t do it.

As robocall empire rises, the FTC strikes back

U.S. government agencies are working to do more than offer targeted consumers more tips to defend themselves.

They are also going on offense against the sources of scam calls and other fraudulent fusillades.

In December 2019, the FTC filed suit against VoIP service provider Globex Telecom for helping scammers run a “reduce your credit card interest rate” con, according to Lois Greisman, Associate Director, Division of Marketing Practices, at the FTC

In January, the FTC sent letters to 19 VoIP providers, “warning them that consumer protection laws apply to them, too, and pointing out what could happen if they kept helping scammy telemarketers break the law.”

Then, just last week, the agency sent nine warning letters to VoIP providers that were “helping Coronavirus scammers blast out robocalls during the current health crisis,” Greisman said. “The VoIP providers that straightened up accounted for billions of calls that we’re all now not getting.”

On Friday, the FTC announced still more warning letters  – this time, bringing partners from the FCC along to double down on enforcement.

Three VoIP providers got the warning letters this time, but there’s a twist, the FTC stated.  

This time, the two agencies also sent a letter to US Telecom — the industry’s trade association — that identifies the entities transmitting the illegal robocalls, a move that comes with serious bite.

Now if the targeted entities haven’t cut it out in 48 hours, the Federal Communications Commission (FCC) “will authorize providers to block traffic from them. So: either way, two days from now, there should be still fewer illegal robocalls trying to rip people off,” Greisman said.