Consumers may be struggling to come to grips with a “new normal” during the ongoing coronavirus (“COVID-19”) epidemic, but fraudsters are pressing forward with a variety of online scams and fraudulent conduct, swindling millions of dollars from American consumers just in a matter of weeks.
The Federal Trade Commission reports a recent spike in complaints concerning to COVID-19-related scams. Reports primarily include travel and vacation scams involving cancellations and refunds, problems related to online shopping, mobile texting scams, and government and business imposter scams. So far, consumers have reported a loss of a whopping $5.85 million, with a median loss of $599
To date, there have been 8,433 COVID-19-related complaints and the number continues to grow exponentially. In just 48 hours, from March 29 to March 31, approximately 1,200 COVID-19-related reports were made to the FTC, resulting in a reported loss of $750,000.
Scammers are using fraudulent robocalls, fictitious online offers for vaccinations and home test kits, false emails related to checks from the government, and even fake charities and crowdfunding websites to bamboozle consumers into fraudulent purchases and steal their identities. More information on FTC guidance and tips to avoid becoming a victim of these scams can be found in our recent article, “FTC Takes Action and Provides Guidance on Avoiding COVID-19 Scams.”
The FTC and the Food and Drug Administration also warn consumers to ignore suspicious and fraudulent advertisements and not to click on any advertisement promoting products that can cure, treat, or prevent COVID-19. Currently, there are no approved vaccines, drugs or investigational products available to treat or prevent the virus.
For regular updates on the latest impact of COVID-19 on the financial services industry, visit the Pepper Hamilton / Troutman Sanders COVID-19 Resource Center.