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How to Protect Yourself From COVID-19 Financial Scams
Scamming attempts are on the rise as more people seek financial assistance online, due to the Coronavirus. Data from the Federal Trade Commission shows Americans have already lost nearly $70 million to pandemic scams since the beginning of the year.
“Many have been filing for unemployment benefits, so when a call or email comes in pretending to respond to your inquiry, it might be harder to differentiate between who is real and fake,” says Jade Hickton, Private Investigator at Smith Training Centre. Learn how to detect the warning signs to avoid falling for these fraudulent crimes.
Here’s how to spot the most common COVID-19 scams
One of the most attractive things for fraudsters during the pandemic has been government refunds — including stimulus checks. Scammers impersonate members of the Treasury Department or IRS over the phone, claiming they need personal details to verify your identity or get your stimulus check to your account faster. They may even ask for an advanced fee or charge for their services.
Scammers also use robocalls to claim that you have a refund waiting — either from the government or from some charge you’ve incurred. The best thing to do is to hang up the phone. The IRS will communicate with you through the postal service. They will never call or text you links that require payments.
As of June 20, almost 33 million Americans are collecting unemployment benefits, and millions are still filing each week. So, another common scam is being offered help when applying for aid, such as the Payment Protection Program (PPP). Of course, during the process, you would share important personal and financial information that they now have. No one is going to call to offer you help, don’t fall for this scam.
Social security benefits
Social security benefit scams have been around for a long time, though they have evolved since the beginning of the pandemic. Scammers may claim that your social security number or benefits are “currently suspended” due to COVID-related office closures. They then require you to provide personal details or wire money to maintain your benefits throughout the pandemic.
It’s true that social security offices are closed right now, but your benefits remain intact. The Social Security Administration (SSA) will mail you notices if there is ever an issue with your benefits; they will never call or text you.
Mortgage escrow fraud
Few of our financial transactions are in-person anymore. This is why home buyers may not question an email that asks them to wire money to close a home purchase — also known as a mortgage escrow fraud. Once that money is sent, it’s impossible to get back.
“The scammer will masquerade themselves as an employee of a title company that a homebuyer is working with,” says Heather Wilson, real estate agent for property management companies. “They will use a local phone number, fake website, and similar email to the title companies then provide the unsuspecting homebuyer with wire instructions on how to send them money.”
The days of poorly spelled emails are over. And scammers are investing time in creating convincing websites. Wilson suggests that buyers work with companies with cyber fraud insurance and always double-check the information given to you.
Scammers also target people struggling with their student loan balance and offer loan forgiveness or paused payments in exchange for a set fee. Since federally backed student loan payments are paused, due to COVID-19, anyone offering to suspend your payments is after your money and information. Borrowers should also keep in mind that servicers will never require a fee for student loan assistance.
How to protect yourself
The most apparent scams will use urgent or threatening language and ask you to provide personal information or download files, Hickton shares. “The best course of action is to be vigilant and not to panic. If you remember these tips, you’re already a step ahead of the scammers.”
Trust your instincts and hang up the phone if you believe you’re on the phone with a scammer.
“Contact the organization directly and not with the number they texted you or came in the mail, look it up online. If the other party claims to be from IRS, your utility company, or another agency, tell them you’ll contact them directly,” says Leslie H. Tayne, Esq., managing director of Tayne Law Group, P.C.
If something feels off, it probably is. Keep these things in mind if you’re unsure.
- Government agencies will send you notices through the mail. They will not contact over the phone or through email.
- Representatives will never threaten legal action if you do not immediately pay what they are asking for.
- Legitimate agencies will never require payments through gift cards, prepaid debit cards or wire transfers.
Reporting financial scams
Identifying financial scams is half the battle, but knowing how to handle the situation after the encounter is equally important. If you think a scammer has contacted you, but you’re not entirely sure, report it anyway.
- Report social security scams to the Office of the Inspector General.
- All scams can be reported to the Federal Trade Commission.
- Contact the F.B.I if you have been contacted by someone claiming to be from the Treasury Department.
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