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April 9, 2020

'Opportunistic cruelty': Covid-19 scammers are targeting consumers—and even physicians

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    The federal government is warning Americans to be on the lookout for scammers peddling fake coronavirus cures and testing, price gougers, and hackers looking to intercept Americans' coronavirus stimulus payments.

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    As fears of Covid-19, the disease caused by the new coronavirus, sweep the nation, hackers, cybercriminals, and others are using the epidemic as an opportunity to scam money from unsuspecting Americans. The Federal Trade Commission (FTC) said it had received approximately 12,600 complaints regarding coronavirus-related scams as of Monday, and a report published Sunday by the Association of Certified Financial Crime Specialists stated that consumers have claimed nearly $5 million in losses since the beginning of this year due to such scams.

    FTC said it's received nearly 300 complaints about scammers impersonating government officials, which resulted in losses of roughly $315,000. According to The Guardian, scammers posing as government officials have solicited personal information, fees, and donations from consumers. In Florida, some scammers went as far as to knock on people's doors while wearing white lab coats and claiming to be officials from government health departments.

    Other scams involve the sale of fake Covid-19 testing kits, as well as treatments and vaccines—even though there currently are no approved vaccines or drugs for the disease.

    For example, authorities arrested Keith Middlebrook, an actor in California, after he told thousands of his social media followers that he'd created a "cure that shuts down the Covid-19 … within 48 hours" and solicited money from individuals interested in investing in the fake treatment.

    In another example, the Department of Justice (DOJ) recently filed a complaint against a website that claimed to sell a vaccine for the new coronavirus. The website charged buyers' credit cards for $4.95 in shipping costs, according to DOJ.  

    Some scammers are even looking to capitalize on the nation-wide shortages of personal protective equipment (PPE) for health care workers and common household items, such as toilet paper, by gouging prices. Lt. Arnold Aldana from the San Diego Sheriff's Department explained, "With products flying off the shelves … [p]eople are trying to make money off the situation." He said, "Some consumers are panicking and thinking they need to spend their hard-earned money to get this overpriced stuff."

    In one instance, federal agents arrested a man in Brooklyn, New York, after he allegedly tried to sell a physician almost 1,000 N95 masks and other medical supplies for $12,000—which is a markup of about 700%, federal agents said. 

    Similarly, Amazon has reported removing more than 500,000 price-gouged products from its online platform and suspending 2,500 sellers for price gouging.

    Cybersecurity threats are also on the rise, with hackers targeting Americans with phishing emails, or scam emails that lure consumers into forfeiting their private information.

    One of the first coronavirus-related phishing attacks that circulated last month was an email message that appeared to be from the World Health Organization (WHO). The email instructed readers to view an attachment that contained information on how to protect themselves against Covid-19. However, clicking the link downloaded an installer onto users' computers that allowed hackers to lift information from the users' keystrokes, according to Malwarebytes.

    In addition, U.S. Attorney General William Barr on March 20 warned Americans of Covid-19-related ransomware attacks that lock victims' computer files until they agree to pay scammers a certain amount of money.

    Other scammers are targeting smartphones with false claims that certain smartphone applications could help users track the new coronavirus' spread through their communities. However, once a user downloads the apps, hackers are able to listen through the victims' microphones, view their messages, and access their smartphone's camera, USA Today reports.

    Further, the IRS is warning of scams intended to divert stimulus payments being doled out to Americans.

    IRS, FBI crack down on coronavirus scams

    Lawmakers are pressuring federal authorities to protect Americans from the attacks.

     "There needs to be strong oversight to ensure the federal government is doing all it can to prevent Americans from being taken advantage of and having their cash payments stolen," said Sen. Ron Wyden (D-Ore.).

    FTC in response to the attacks published a list warning Americans of Covid-19 related scams and threats, and the IRS last week published a similar warning, saying retirees may be most vulnerable to the scams.

    The Treasury Inspector General for Tax Administration (TIGTA) on Tuesday also warned Americans of possible scams related to the stimulus payments. Inspector General J. Russell George noted, "Previous government assistance efforts have been used by crooks and scammers who see this as an opportunity to defraud taxpayers in every way possible." George explained that the IRS will never request that people share their personal or financial information over phone call, email, text message, or social media, and he encouraged people to report anyone who claims to be an IRS or Department of Treasury official to the TIGTA.

    Meanwhile, the FBI will look to crack down on scammers who are trying to capitalize on fear and panic surrounding the Covid-19 epidemic, according to Paul Delacourt, the assistant director of FBI's Los Angeles field office. "The FBI is using a variety of tools to identify anyone who exploits the current crisis … and is proactively warning investors to thoroughly research any salesperson or any product claiming to save lives, before losing their money, or creating false hope," he said, adding, "There's a particular opportunistic cruelty in seeking to profit based on the fear and helplessness of others" (Saltzman, USA Today, 4/4; Jagoda, The Hill, 4/7; McCormick, The Guardian, 4/8; LaFraniere/Hamby, New York Times, 4/5; WPTV, 3/20).

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