Americans Have Lost $382 Million to COVID-Related Fraud
by Maurie Backman | Updated July 25, 2021 - First published on March 26, 2021
Criminals have been at it during the pandemic, and the impact has been huge.
Though the coronavirus pandemic put an end to a lot of common activities like traveling, socializing, and dining out, it didn't manage to stop criminal activity. In fact, the Federal Trade Commission (FTC) estimates that pandemic-related fraud has already cost Americans a whopping $382 million.
Since January of 2020, more than 217,000 people have filed coronavirus-related fraud reports. The median loss per consumer was $330, but seniors tended to claim higher losses. People in their 70s lost around $500 to fraud, while those in their 80s lost $900.
Why the uptick in criminal activity?
A lot of extra relief went out to the public in 2020, like stimulus checks and unemployment benefits. And that alone opened the door to more fraud.
Some criminals filed unemployment claims on behalf of other workers and then diverted benefit payments to their own bank accounts. Similarly, some criminals stole stimulus checks by conning people into sharing personal information like bank account details and Social Security numbers.
Of course, even in normal times, criminals tend to be out in full force, doing everything from making fraudulent charges on victims' credit cards to opening new accounts in their names. And this "classic" fraudulent activity didn't go away during the pandemic, either.
Finally, the introduction of coronavirus vaccinations led to an increase in scams, with criminals offering people early access to a jab in exchange for a fee. Sadly, the FTC's $382 million estimate is likely a lowball guess as to what fraud amounted to last year because it's based on actual reports filed by consumers. Since many people may not have realized they fell victim to fraud, total losses could be much higher.
How to avoid becoming a fraud victim
Pandemic or not, it's always important to do what you can to avoid falling victim to financial fraud. One of the most important things you can do is check your credit reports regularly. As a general rule, checking in once every four months is a good idea, though it's worth noting that you can look at your credit report for free every week right now.
Your credit report lists all of your open accounts and the balances for any debts you owe. If any of those numbers look off, take action. Report that fraud to the relevant credit bureau and reach out to the financial institutions in question so you can resolve the issues.
You can also avoid financial fraud by knowing what scams tend to look like. Random emails or text messages asking you to provide bank account details or send money should automatically be treated as suspect. The same holds true for phone calls of that nature.
With regard to the pandemic, you should know that the coronavirus vaccination is free for all people. If someone calls you with an offer to get vaccinated in exchange for a fee, don't bite -- it's just not legitimate.
What's more, there's a round of $1,400 stimulus checks going out right now. It's important to know that the IRS will not call you out of the blue to verify your bank account information or Social Security number. Anyone who contacts you asking for those details deserves a hang-up -- and from there, you should report the incident to the FTC.
Unfortunately, the pandemic hasn't been enough to deter criminals from taking advantage of unsuspecting victims. Stay vigilant by checking your credit reports and knowing what red flags to look out for. That way, you hopefully won't join the millions of people who have been cheated out of money during these already trying times.
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