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Fraud Schemes During COVID-19 Pandemic

The U.S. Federal Government has passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help individuals and businesses cope with economic impacts of the COVID-19 pandemic. As welcome as this relief might be, it also opens up opportunities for fraudsters to commit crimes by preying on confusion about stimulus checks and loans. The Better Business Bureau (BBB) has warned that scams are ramping up in the next few weeks while the government prepares to distribute federal funds.

Types of Scams
The BBB says government imposters are reaching out to individuals and businesses through phone calls, social media, and text. Specific scams include:

  • Facebook posts targeting seniors that claim the existence of COVID-19 grants to help pay medical bills. The posts contain a link to a fake website for a fraudulent government agency called the U.S. Emergency Grants Federation.
  • Scam calls to small businesses about virus-related loans or funding. The scam requires businesses to supply personal information or payment in order to qualify for the loan.

Government Agencies Will Not Contact Individuals
According to the Internal Revenue Service (IRS), relief payments will be automatic and be deposited in the same account used for individual annual tax payment/refund. The IRS provided additional guidance for COVID-19 relief payments: The IRS will not call you for information about your bank account or debit card.

  • There is no need to sign up for relief checks or call the IRS. The payment is automatic.
  • If you receive a relief check in the mail before the official government distribution, this check is fraudulent.
  • It is also a scam if a government official contacts you and claims you can get your stimulus check faster if you provide personal information.

Small Businesses Are Targets
Businesses are also at risk right now. Bad actors posing as government imposters are attempting to get personal information and/or payments. As part of CARES, small businesses can apply for a loan through their financial institution and verify who they are working with.  Additional guidance from the Federal Trade Commission (FTC) includes:

  • If a government agency contacts your business, don’t automatically assume it is legitimate. Check online to make sure the agency exists.
  • Be wary of social media posts from friends directing you to websites for government small business grants. Scammers can easily impersonate your friends on social media.
  • Never give out your business’ financial information over the phone.
  • Don’t send money to anyone in hope of receiving additional relief funds for your business.

Fraudsters are preying on your fears during this time of uncertainty. By paying attention to how fraudsters operate, you can avoid falling into their trap. If you do fall victim to a scam, report it to the Federal Trade Commission at www.ftc.gov/complaint. For more information on coronavirus-related scams, go to www.ftc.gov/coronavirus.News