COVID Case: More on Financial Fraud During the Pandemic

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Last week, we reported on the rising number of COVID-19-related financial fraud schemes, noting that Credit Karma “found nearly one-quarter of respondents were contacted by scammers via phone calls and emails, and that younger generations are more likely to be targeted by these bad actors.”

Now, the U.S. The Internal Revenue Service is out with a more revealing look at just what types of financial scams are being perpetrated on consumers, and not just on taxes during the pandemic.

The IRS Criminal Investigation Division (CI) reports that it’s seen a “variety of Economic Impact Payment (EIP) scams and other financial schemes looking to take advantage of unsuspecting taxpayers.”

According to CI, “criminals are continuing to use the COVID-19 Economic Impact Payments as cover for schemes to steal personal information and money. Scams related to COVID-19 are not limited to stealing EIPs from taxpayers, however.”

The agency states that a burgeoning number of financial crimes tied to the pandemic are active right now, with “the organized selling of fake at-home test kits, offers to sell fake cures, vaccines, pills and advice on unproven treatments for COVID-19” topping the list.

Other financial fraud alerts include the sales of large quantities of medical supplies through the creation of fake shops, websites, social media accounts and email addresses where the criminal fails to deliver promised supplies after receiving funds, the IRS reports.

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That’s not all. The IRS is reporting additional scams related to the ongoing health crisis – this from its CI division

Other COVID-19 related scams involve setting up fake charities soliciting donations for individuals, groups and areas affected by the disease. Some criminals are offering opportunities to invest early in companies working on a vaccine for the disease promising that the "company" will dramatically increase in value as a result. These promotions are often styled as "research reports," make predictions of a specific "target price," and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.

Finally, CI has also seen a tremendous increase in phishing schemes utilizing emails, letters, texts, and links. These phishing schemes are using keywords such as "Corona Virus," "COVID-19," and "Stimulus" in varying ways. These schemes are blasted to large numbers of people known by the bad actors in an effort to get personally identifying information or financial account information to include account numbers and passwords. Most of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments.

The agency notes that coronavirus-related (COVID-19) scams should be reported to the National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submitted through the NCDF web Complaint Form. Hotline staff will obtain information regarding your complaint, which will then be reviewed by law enforcement officials.

Taxpayers can also report fraud or theft of their Economic Impact Payments to the Treasury Inspector General for Tax Administration (TIGTA). Reports can be made online. TIGTA investigates external attempts to corruptly interfere with federal tax administration, including IRS-related coronavirus scams.

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