5 Scams to Watch out for During the Coronavirus

As Coronavirus (COVID-19) continues to tighten its grip on societies around the globe, it seems that each day brings about a dizzying roster of headlines, ever more concerning forecasts on the outbreak’s impacts on human life, and unfortunately, an uptick in fraudulent schemes.

From radio show host Alex Jones peddling supposed antidotal toiletries – namely, an “anti-Coronavirus” toothpaste – to Dr. Sherrill Sellman and televangelist Jim Bakker marketing colloidal silver products as COVID-19 cures, reports of predatory practices aimed at capitalizing on the world's heightened state of fear have unfortunately increased in these already dark times.

Outside of deceitful health schemes, government entities and consumer protection groups have issued warnings of other malicious behavior taking place during the pandemic. Below, we walk through some of the most notable ruses popping up right now and what you can do to protect yourself in these trying times.

 Counterfeiting and other precious metals scams have long been issues for the investment sector, but during times of crisis, the number of fraud cases, unfortunately, tends to spike.

CNBC reported in early March that a resurgence of gold scams has emerged amid the 2020 Coronavirus pandemic. The write-up notes that fraudsters are using tactics like inflating standard bullion coin values by making false or misleading claims about quality and rarity, promoting hyperbolic statistics to stoke fears, increase demand and drive profit margins, and even “’simple swindles’” in which customers pay for products that are never delivered.

The article also highlights the “empty vault” method that dupes investors into paying for storage services by “dealers” whose promises aren’t fulfilled as advertised or don’t have access to a secure vault or storage facility in the first place.

When exploring precious metals investment opportunities, our team recommends always working with a reputable, valid, and accredited dealer. For precious metals storage, your safest bet may be using state-sanctioned outfits like the Texas Bullion Depository or other operations that are subject to external oversight. Before sending your precious metals anywhere to be stored, you should confirm that the outfit has safeguards and inventory verification measures in place, such as regular government or third-party audits, and the ability for clients to inspect personal holdings upon request.

Additionally, the U.S. Securities and Exchange Commission has warned the public about new “pump-and-dump” investment scams taking hold during the Coronavirus outbreak. In such cases, promoters trick vulnerable consumers into buying up stock for companies whose products or services are falsely said to detect, fend off, or even cure Coronavirus. As a result, the claims go, the companies’ stocks will soar, leading to hefty payoffs for the astute investors who jump on board. As the fraudsters reel in more and more shareholders, stock prices climb higher and higher. Just before the hype reaches its peak, promoters sell of their shares, causing prices to plummet and leaving the unwitting investors behind with losses on their hands.

While the SEC notes that any company can fall victim to fraudulent claims like these, it urges investors to be particularly careful with microcap stocks during times of global distress. The Commission defines microcap stocks as low-priced stocks issued by the smallest of companies – those with market capitalizations of less than $250 or $300 million. Publicly available information about microcap companies, including verifiable details like the outfits' "management, products, services, and finances," is often limited or non-existent, which the SEC notes makes them particularly risky investments.

To protect yourself, the SEC recommends researching companies and asking questions before investing, working with sellers you know and trust, maintaining a healthy level of skepticism toward unsolicited offers and being aware of red flags like offers that sound too good to be true and any promise of “guaranteed returns.”

If you think you have encountered an investment fraud scheme or have any questions or concerns about a particular investment, the SEC recommends reaching out to the Office of Investor Education and Advocacy, the Financial Industry Regulatory Authority (FINRA), or your state securities regulator.

 One of the more egregious scams taking hold these days are calls for donations to organizations (or even individuals) that are not as charitable as they may first appear, or worse yet, don’t even exist.

Much like with investment fraud, charity scams seek to exploit the chaos and confusion that come with significant health events like the current Coronavirus outbreak and prey on the generosity of community members eager to help those in need.

The Federal Trade Commission notes that some scammers use names that sound very similar to those of real non-profits and recommends protecting your charitable gifts by using secure, verifiable, and trackable payment methods like credit cards. Consumers are strongly discouraged from handing over cash, gift cards, or wire transfers, especially during times of crisis.

Much like the SEC, the FTC also urges everyone planning to donate now or in the future to do independent research into organizations before they give, using outlets like the ones outlined here to verify a group’s credibility and donation model.

A few weeks ago, as news of domestic Coronavirus cases mounted, nervous shoppers across the nation began bulk-buying and hoarding food and household supplies, leaving grocery and home goods shelves bare and supply chains reeling.

Amid the panic, many American consumers began shopping online in an attempt to avoid crowds and presumably get ahead of the buying curve. But as staples like canned beans, toilet paper, and hand sanitizer increasingly sold out with lightning speed, some shoppers moved their orders to unverified, and in some cases, fraudulent e-commerce shops.

The FTC reminds shoppers that “[a]nyone can set up shop online under almost any name – including scammers.” The Commission urges Americans to research any online merchant they’re not familiar with before purchasing products from them. An online search for the company’s name, owner, phone number and email address is a great first step. Shoppers are also encouraged to read through feedback posts, comments, and other reviews from previous shoppers to learn more about the company’s customer service track record.

You can also review companies’ profiles on the Better Business Bureau website to learn more about operations and industry reports related to any company in the database.

If you get a solicitation from a company that you’re unfamiliar with or not currently doing business or have contact with, play it safe and disregard!

Getting you to fork over cash for nothing in return is the modus operandi of all the scams listed so far. However, it’s important to remember that in today’s digital world, your personal information is often even more valuable to fraudsters than cold hard cash.

Online scammers prey on unsuspecting web surfers to collect and use personal details for their own devious benefits. While it’s crucial to be wary of sensitive data requests under any circumstances, when crises strike, the need for vigilance skyrockets.

As the FTC and others have reported, phishing emails, texts, and robocalls are being unleashed on the public in droves during this time of rampant, worldwide fear. Phishing campaigns are those in which bad actors pretending to be working on behalf of real and reputable companies request sensitive personal information from unsuspecting individuals, which in turn, is used for often devastating crimes like identity theft or account takeovers. Details requested in such cases can include credit card numbers, usernames and passwords, or worse, Social Security Numbers.

Malintent can be challenging to detect with these types of messages since malicious senders often include real logos or other legitimate identifiers of the companies they are imitating. Phishing messages will typically have a call-to-action for the receiver, like clicking a link and inputting information into what turns out to be a fraudulent online form or downloading an attachment that initiates ransomware installations directly onto a person’s computer.

Some scammers are also using vulnerable portions of real organizations’ websites to infect end-users' computers with malware, which can steal passwords or cause other harm. The compromised Coronavirus dashboard from Johns Hopkins University is one such example reported by the FTC recently.

Even though spam and telemarketing phone calls have become commonplace in recent years, it’s important to remain skeptical of this type of outreach, as well, especially during the current Coronavirus crisis. Often, these phone calls will request verbal confirmation of personal details like name, contact information, bank or other account details, or even highly sensitive government-issued identifiers like your Social Security Number.

Play it safe and disregard all messages requesting your data!

In the last few years, if you’ve paid any amount of attention to headlines, you’re probably familiar with the term “fake news.”

While the idiom has indeed become commonplace in today’s vernacular, it’s important to remember that the spreading of misleading, unreliable, or intentionally false information is a real tactic used by bad actors around the globe.

The intent and desired outcome of disinformation campaigns can vary widely, from perpetuating confusion within a populace to sowing violence and civil unrest. Whatever the result, these strategies are designed to dupe you into believing things that aren't true, or worse, provoke you to carry out actions that are unwise or even dangerous.

It’s always important to think critically about the information we consume, but amid a global crisis like the Coronavirus outbreak, the stakes become even higher. It’s crucial in times like these to remain diligent in seeking factual information, consuming reports from reputable outlets that uphold journalistic integrity, thinking critically about claims being made, and practicing responsible information sharing.

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The global Coronavirus pandemic we’re currently living through is most likely just beginning in the United States. With such a long and taxing road ahead, it’s more important than ever to keep our wits about us, stay informed and protect ourselves and our finances against perverse and damaging scams.