The COIVD-19 pandemic and its negative impact on the economy have created the perfect environment for scams to proliferate. We are all experiencing some COVID-19 related anxiety, whether it be fear of becoming ill ourselves, concerns about infecting others, the financial stress of a job loss, or the inability to maintain in-person social connections while in lockdown.
These real psychological and financial impacts make us more susceptible to fall for bogus offers of assistance or to have our personal information used to take advantage of new government programs.
This week, I was contacted by someone who received a notice regarding a claim for Pandemic Related Unemployment Assistance that she did not file. She also received a benefit determination letter stating she was eligible for $267 in weekly state-funded benefits and $600 in weekly Federal Pandemic Unemployment Compensation as authorized under the CARES Act. Since she had not filed any unemployment compensation claim, she immediately filed a fraud claim via the fraud reporting website referenced in the letter.
The fact the notice provided a clear means for reporting fraudulent claims tells us that such claims are common. The existence of the additional federal unemployment benefits has likely greatly increased the incidence of fraudulent claims. While no financial harm came from the filing of the unemployment claim, it raised the question of whether her personal information had also been used to obtain credit or take other actions that would have financial ramifications.
This is just one of many scams that have been proliferating during the pandemic according to warnings from the Federal Trade Commission, Internal Revenue Service and the Securities and Exchange Commission. The FTC has a laundry list of scams that have been identified on its website, which reached victims via text, email and phone.
Texts may come through with offering a cure or opportunity to be tested for coronavirus. Others may appear to come from government agencies including one from the Federal Communications Commission offering $30,000 of COVID-19 relief to consumers. There is no such program. Texts appearing to be from the IRS have also been reported. These are designed to pray on individuals anxious to receive their $1,200 Economic Impact Payment authorized by the CARES Act. The text message contains a link to a website that appears to be a legitimate IRS website which requests personal information including date of birth, social security number, tax filing status and a debit or credit card number in order to verify the visitor's identity. Even text messages offering free Netflix service, designed to take advantage of those adhering to stay at home orders, have been reported.
The bottom line with these unsolicited text messages is to avoid clicking on any links they contain, just like you would for any unsolicited email that may appear to be from a legitimate source. All of them are designed to collect personal information to be used for other purposes.
Robocalls claiming to be from the World Health Organization and U.S. Department of Health have also been reported, along with calls offering work-from-home opportunities, student loan assistance and debt consolidation programs. Like the text scams, all of these are designed to obtain personal, financial or health related information from the potential victim. To protect yourself from these calls, avoid answering them or hang up immediately when you realize the caller is unfamiliar to you. Never provide any personal information.
If you find your information has been compromised, perhaps from a notice regarding a fraudulent unemployment compensation claim, there are a few steps you should take to prevent or at least limit the financial damage. First, request a copy of your credit report form www.annualcreditreport.com and review it for unfamiliar accounts or recent inquiries. If you find that an unfamiliar account has been opened, contact the creditor to review it and close it if appropriate. You should also consider placing a fraud alert on your credit file, or even a credit freeze. This will make it more difficult for a fraudster to obtain credit in your name. Also, be sure to closely monitor your bank and credit card accounts for unusual transactions. It is also a good idea to update passwords on all your online financial accounts and even social media accounts. For more information on how to respond to identity theft, the FTC provides guidance at www.consumer.ftc.gov.
David T. Mayes is a Certified Financial Planner professional and IRS Enrolled Agent at Three Bearings Fiduciary Advisors, Inc., a fee-only financial planning firm in Hampton. He can be reached at (603) 926-1775 or firstname.lastname@example.org.