Another Day, Another Scammer

For every feel good news story out there, for every frontline worker, for every good Samaritan, for every 7 p.m. round of applause, there seems to be a scammer. And while businesses and individuals alike are transitioning to a quarantined world, so too are the bad actors and bad apples. Leave it to the scammers of the world to use technology to take advantage of those down on their luck. As Taylor Swift says, “the haters gonna hate”; so too the scammers are going to scam.

Since the start of the Coronavirus pandemic, the world has changed: companies have closed, initial jobless claims are off the charts, 130k (and climbing) have died. Everyone is working to adjust to the new normal, but, for many in the United States, it has not been easy, even with the help of a large government stimulus.

Small businesses have been hit particularly hard these past few weeks. Governmental relief is on the way, via the CARES Act’s Paycheck Protection Program (PPP), which contained $376 billion in relief for American workers and small businesses. The PPP aims to help small businesses pay their employees via small bridge loans and debt relief. However, applying for and receiving this relief has been tedious and painful. The Chicago Sun Times reports computer delays, site glitches, unclear requirements, copious fine print, and a complete lack of communication about timelines.

“Talk to 20 business owners, and they’re all hearing something different from their banks,” said Amanda Ballantyne of Main Street Alliance, when interviewed by USA Today. This confusion and a lack of clear messaging opened the door wide to scammers.

Email scams and robocalls are nothing new. We have all received them, despite phone service providers’ recent crackdowns. It is not too far-fetched to think that just as soon as Alexander Graham Bell put down the receiver after completing his first phone call, next on the line was someone telling him he owed back taxes to the IRS or that he’d won a cruise.

Fraud scams cost Americans over $1.9 billion in 2019, and the Federal Trade Commission has estimated that Covid-19 scams have cost Americans over $13.4 million so far, and that number should only climb.

Scams targeting small business owners seem to be the most prevalent right now. According to the Better Business Bureau, this is how the scam usually works:

· Small business owners are confused and overwhelmed by the myriad of messages they receive and the various application channels they have gone through

· With all these conflicting messages and a personal combination of hope and desperation, it can be easy to mistake a scam call or email for a real offer

· Scammers will often say they are from the U.S. Small Business Administration (SBA) or the Treasury Department and just need the business owner to complete a simple form, where personal data is unwittingly given to a scammer

· Finally, to complete their application, many small business owners are told they must pay a “processing fee”, which can be as high as a few thousand dollars.

Other scams come in the form of malware, phishing, or someone claiming they can fast pass your application…for a fee.

It is not hard to see why desperate small business owners might be willing to pay a fee or fill out another form if it helps them get across the finish line to receiving government assistance. Unfortunately for many, that help never comes.

These type of COVID-related scams are not unique to the United States. Back in March, the European Central Bank issued a letter of advice to banks around the world about the banking-related issues they might face. One of their warnings was of “risks of increased cyber-security-related fraud, aimed both to customers or to the institution via phishing emails.” The World Health Organization (WHO) put out their own message, warning of “hackers and cyber scammers…taking advantage of the coronavirus disease (COVID-19) pandemic by sending fraudulent email and WhatsApp messages that attempt to trick you into clicking on malicious links or opening attachments.” Both of these warnings have come true.

Phishing emails, scam calls, malware: scammers are getting creative and are juicing this pandemic for all it is worth. And now that individuals are beginning to receive their $1,200 stimulus checks from the United States government, we should expect the scams to only increase. Everyone should be alert and aware as we face the next round of attacks from a different kind of virus.

#CBSDigitalLiteracy

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