With the onset of the COVID-19 pandemic, there’s been a significant rise in online scams specifically relating to the contagion itself.
Among those, there have been an increasing number of fraudulent financial offers, where scammers pose as banks, investors or debt collectors, with offers designed to steal financial information.
With the onset of the COVID-19 pandemic, there’s been a significant rise in online scams!
It is not hard to see why the crisis might provide fertile ground for fraud. The combination of financial and health threats makes people more vulnerable and creates opportunities for fraudsters.
To arm yourselves against such frauds, this article explores popular COVID-themed frauds, some tips to help you spot and avoid these scams, so you can stay safe and keep your money under lock and key.
In India, after the central bank announced a pause on monthly dues (EMI) on loans, there were cases of borrowers getting calls asking for OTPs (one-time passwords) to process the EMI deferment online.
(These calls were made by tricksters trying to get hold of the OTP on a fraudulent transaction to siphon money from borrowers’ accounts.)
Agencies in the US and elsewhere in the world have warned about a surge of coronavirus-themed phishing and ransomware attacks hitting healthcare entities as well as organizations in other sectors.
In addition, institutions involved in COVID-19 medical research are being targeted by cybercriminals and hacker gangs with motives ranging from theft of intellectual property to disruption of operations.
Agencies in the US and elsewhere in the world have warned about a surge of coronavirus-themed phishing attacks!
Globally conmen are employing a variety of ruses!
Reports say that globally conmen are employing a variety of ruses — such as pretending to offer access to government benefits and offering refunds on travel and hotel booking cancellations.
Also common were instances emails were sent supposedly from organisations such as the World Health Organisation (WHO) and government agencies offering medical products, purported cures and vaccines.
Some even dangled online offers including free subscription to channels such as Netflix!
Simple scams to much sophisticated ones: Here’s a list of prominent ones!
There are broadest categories of online financial frauds, from the simple to the sophisticated. Here are some prominent ones.
• The usual: Identity theft via ‘Phishing’, ‘Vishing’, ‘SMiShing’ and skimming
Identity theft involves getting hold of potential targets’ personal details and account numbers and once they have them, they are then used to commit identity theft.
Identity theft approach hasn’t changed in this pandemic, other than it being more rampant than ever!
And the approach hasn’t changed in this pandemic, other than it being more rampant than ever.
Vishing is short for ‘voice phishing’ and SMiShing is phishing through SMS. In vishing, confidential information is taken over the phone, while in SMiShing, he attempts to trick via phone messages.
In skimming, fraudsters skim information from cards, using specially made devices. Fraudulent online transactions can be done using skimmed data and confidential information.
Mobile banking frauds include fake or similar interface apps, the app being mapped to an incorrect mobile number, SIM swaps and malware.
• Pump-and-Dump schemes growing in number
How these work is people get an email, or find a website, claiming that a certain company has discovered a vaccine or found a cure for COVID-19. They are then asked to buy shares in the firm now.
And like how all pump-and-dump schemes normally work, they are told that this is a major investment opportunity and the stock price is going to go up soon.
In reality, the fraudsters own many of the company’s stock.
They create hype through internet campaigns to encourage people to buy the stock and artificially increase the price.
As soon as the price increases, the fraudsters sell their shares, the price of the shares fall, and the new investors lose money.
• Work-from-Home scams grow rampant
Scammers often advertise an opportunity to secure high profits by working from home as a securities or derivatives trader without requiring a license or experience in the financial markets.
But the firm seeks payment from these would-be traders. Anyone in the business of trading securities or derivatives, or providing investment advice must be registered with their local securities regulator.
Always check the registration of any person or business trying to sell you an investment or providing investment advice.
REMEMBER: Contact your securities regulator to ask about or report a possible fraudulent investment opportunity.
• Fraud through instant real-time payments (RTPs)
If you thought being scammed through mobile payment platforms like Google Pay, Apple Pay or PayPal would be the least of your worries in an already panic-filled pandemic environment, think again!
If you thought mobile payment platforms like Google Pay, Apple Pay or PayPal were safe from scammers, thank again!
In such frauds, fraudsters are asked victims to click on links, accept ‘collect request’ received over text messages and enter mobile PIN (Personal Identification Number) required for the payment gateway.
Fraudsters could also ask to share debit card details, OTPs, and use this data to create a new virtual payment address (VPA) ID and set a new mobile banking PIN.
A virtual payment address (VPA) is an identifier that can be uniquely mapped and linked directly to an individual account. After the VPA is set up all you need is a mobile banking PIN to transact digitally.
• Loan scams that seek an upfront fee
Especially targeting people in dire financial need as a result of the pandemic-induced economic downturn, loan scams are particularly rampant these past months.
How they work? Through an ad in a well-read publication or internet site you are guaranteed a loan or credit card regardless of credit history. These ads usually depict very attractive interest rates.
Especially targeting people in dire financial need as a result of the pandemic-induced economic downturn, loan scams are particularly rampant these past months.
And moreover, these scams request an up-front fee via a money transfer or a credit card. These fraudsters sometimes create fake websites with copied logos from reputable institutions.
BEWARE: Legitimate lenders will never guarantee or suggest they probably will provide a loan before you apply and before your credit history is verified.
Preventative measures protecting oneself from falling prey to online COVID-19 financial scams
So, it is important to be informed, and safe and secure in our financial transactions.
• Know how scammers may reach you
Scammers are taking advantage of the increase in COVID‑19 communications by disguising their scams as legitimate emails and malicious websites about the virus.
• Visit authoritative websites directly
Scammers often pose as well-known, trusted and authoritative sources. Directly visit sources like WHO.int or CDC.gov to get the latest factual information about COVID‑19.
• Be cautious of requests for personal or financial information
If you receive an unsolicited request for personal or financial information, take extra time to evaluate the message.
Scammers often pose as well-known, trusted and authoritative sources.
BEWARE: Scammers will often ask you to input login information, or share bank details and addresses with them. They may also request payment via bank transfer or virtual currency.
Make sure the nonprofit is legitimate by checking if they are government registered. Scammers also pose as legitimate nonprofits.
TIP: To be more confident your money will reach a nonprofit, you can donate directly through their website ─ rather than clicking a link sent to you.
• Double check links and email addresses before clicking
Fake links often imitate established websites by adding extra words or letters. If it says something like "click here," hover over the link or long press the text to check the URL for mistakes or typos.
TIP: If you spot either, be careful not to click it. Misspelled words or random letters and numbers in the URL or email address may also indicate a scam.
Fake links often imitate established websites by adding extra words or letters.
• Search to see if it’s been reported
If somebody has sent you a fraudulent email, it’s likely they’ve sent it to other people as well. Copy and paste the details of the message into a search engine to check if it’s been reported by others.
By requiring two steps to gain access to your account you get another layer of security.
CHECKLIST: How should you react as soon as you suspect fraud? Here are some must do’s!
These are some general rules that apply against any investment fraud, even beyond these above mentioned online scams.
Once you got a suspicious email or you know you’ve been made a potential target, you should:
• Get a second opinion
Be skeptical of unsolicited investment opportunities that you might receive online or from acquaintances. Before you invest, call the regulator or get a second opinion from a registered advisor.
• Take all the time you need
Be suspicious of limited-time offers and high-pressure salespeople. You should never feel pressured to buy an investment on the spot. Take the time you need to make an informed decision.
Be skeptical of unsolicited investment opportunities that you might receive online or from acquaintances.
• Research the investment
Before you make any investment, understand how it works and the risks and fees associated with it. Don’t be afraid to ask questions and make sure that it fits with your financial goals.
Before you make any investment, understand how it works and the risks and fees associated with it.
Don’t be afraid to ask questions and make sure that it fits with your financial goals.
