Coronavirus scams, feeding off investor fears, mimic fraud from the 2008 financial crisis

  • Fraudsters take advantage of fear around big headline news, like the coronavirus, to steal money from unsuspecting consumers. 
  • Expect to see more phishing and investment scams similar to those in the 2008 financial crisis. 

Coronavirus scams are emerging, and many look remarkably similar to frauds from the 2008 financial crisis.

Government agencies like the Federal Trade Commission and Federal Deposit Insurance Corp. issued warnings this week for Americans to be vigilant as con artists attempt to steal from consumers spooked by an onslaught of bad news related to COVID-19.

“In any crisis, you see scams pop up that are tied to the headlines,” said Barbara Roper, director of investor protection at the Consumer Federation of America.

In many ways, the current crisis and its 2008 predecessor are quite different — this one caused by a pandemic that has infected more than 250,000 worldwide and the other by broad and systemic failures in the financial system.

During the Great Recession, investment fraud and other consumer scams were rampant, preying on people’s fear of uncertainty in the stock market and a high rate of unemployment rate, said Joseph Peiffer, managing partner of law firm Peiffer Wolf Carr & Kane.

Still, Peiffer expects a similar degree of foul play now, leveraging those same financial fears, during the coronavirus health crisis, which looks likely to plunge the U.S. into a deep recession in the near term.

Take economic stimulus, for instance.

Republican senators on Thursday unveiled a stimulus package that, among other things, would send up to $1,200 in relief payments to Americans.

Scammers have launched “phishing” attacks, via text message and e-mail, to take advantage of potential check recipients. Their messages can appear legitimate — perhaps with a prompt such as “Click here to get your money now.”

However, the hyperlinks are malicious. If the links are clicked, con artists can access a computer or phone and steal sensitive information such as Social Security numbers and bank account data. They can then steal identities, money or both.

Robo-callers posing as federal employees may also request sensitive information over the phone as a precondition to receive federal money.

These types of attacks are always underway, but ramp up during times of chaos.

Source: https://www.cnbc.com/2020/03/20/coronavirus-scams-on-the-rise-mimic-fraud-in-2008-financial-crisis.html

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