DOJ Warns COVID-Related Fraud on the Rise

After every natural disaster, the U.S. sees spikes of fraud like identify theft, scam charities, and phishing emails. Just like hurricanes, flash floods, blizzards, and tornadoes, COVID-19 has wrought hardship and confusion among consumers, providing a perfect opportunity for bad actors looking to take advantage of the most vulnerable.

In late February and early March, as the virus became more prevalent in American media, Menlo Security, a cybersecurity firm based out of Palo-Alto, found 32 times the usual number of daily successful attacks. On March 11, the same day the World Health Organization declared Covid-19 a pandemic, the company saw a surge in successful attacks.

According to CNBC, the U.S. Secret Service sent out alerts to law enforcement and banking officials warning about fraudulent emails. Attachments to these emails are intended to install malware onto company computers to give the attacker access to private company and customer information. “During the coronavirus outbreak, many companies and organizations have sent emails containing COVID-19 updates to their customers to make them aware of their current response and status. As these types of emails become increasingly frequent, criminals have started to use this familiarity to their advantage,” the alert said.

Online shopping has been an area of increased interest, and retailers like Amazon are attempting to combat fake third-party sellers that could be scamming both Amazon and its customers. Prior to the virus, Amazon preferred to meet with its third-party vendors in person, to verify their legitimacy to protect customers. Now, due to social distancing, the company has had to resort to other ways of verifying these sellers.

Amazon has turned to video conferencing technology to verify third-party vendors. The company says it has screened over 1,000 prospective sellers through this process so far. Third-party retailers make up over 50 percent of Amazon’s business, but with millions of products sold every day, fraud could prove difficult to manage. Last year, The Wall Street Journal investigated Amazon’s practices involving third-party sellers, saying that “In practice, Amazon has increasingly evolved like a flea market. It exercises limited oversight over items listed by millions of third-party sellers.”

Online retailers find themselves more vulnerable as well. Some less scrupulous online customers are creating multiple fake email accounts in order to get first time user discounts and referral bonuses at online stores.

After hurricane Katrina, the Department of Justice established the National Center for Disaster Fraud (NCDF), where people can report any instances of fraud related crime they come across. This applies for both natural and man-made disasters, and according to a DOJ press release, includes “more than 20 federal, state, and local agencies.” Currently the DOJ cautions people to be on the lookout for scams including:

  • Healthcare fraud involving testing and treatment through emails, phone calls, or in person.
  • Cryptocurrency fraud schemes using blackmail, work from home scams, and investment scams.
  • Emails and Phone calls from individuals claiming to be IRS or Treasury employees.

Consumers should also follow guidelines from the FBI when to help guard against potential fraud. Some red flags include:

  • Unexplained urgency
  • Last minute changes to wire instructions or account information
  • Changes in communication platforms (switching from Gmail to Outlook, for example)

DOJ also reminded consumers that the IRS first contact with individuals comes via snail mail, never through email or phone calls.

Consumers who think they have experienced fraud should call the National Center for Disaster Fraud Hotline at 866-720-5721 or email at disaster@leo.gov.

+ posts

Share

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email

Subscribe to get the latest consumer news

More consumer News