$100 Million in Losses and Counting in Summary: Is Someone You Know A Victim of COVID-19 or Stimulus Fraud?

$100 Million in Losses and Counting in Summary: Is Someone You Know A Victim of COVID-19 or Stimulus Fraud?

August 14, 2020         Written By Sara Saucier

We would have never guessed that in 2020, we as the United States, would face so many different challenges and hurdles, let alone be facing the largest fraud spread America has ever seen! There have been 160,000 fraud reports related to COVID-19 and stimulus checks, in those 160,000 reports fellow Americans have lost over $100 million and counting. While this has affected America as a whole, not all areas of the country have been equally affected, some states have accumulated much larger losses due to fraud than others.

 

What is COVID- 19 Fraud?

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Fraud– noun

  1. wrongful or criminal deception intended to result in financial or personal gain.

Now that we have established the true definition of fraud, we can start to understand what the term “COVID-19 Fraud” means. Let’s take a look –

COVID-19 Fraud- noun

  1. any type of scam, fraud, or identity theft related to the novel coronavirus.
  2. Federal Trade Commission (FTC) classifies a report as COVID-19 fraud or identity theft if a consumer mentions specific terms in said report, such as “COVID” or “stimulus.

Here are some examples from the FTC of common COVID-19 fraud:

  • Offers for at-home COVID-19 test kits or vaccinations
  • Stimulus payments scams
  • Robocalls offering scam services, such as inexpensive health insurance or work-from-home jobs
  • Sales of personal protective equipment (PPE) with delivery dates the seller knows they can’t meet

But do not think these are the only examples, as scam artists have gotten creative with their methods, so please always be mindful, if something doesn’t quite “sound right” or, like my father always told me, “If it sounds too good to be true, it just might be, too good to be true”.

As of August 10, 2020, the FTC has recorded a rounded number of 161,000 reports of COVID-19 and stimulus check fraud. The top 10 states with the highest total fraud loss are as follows:

  1. California – $15,630,000
  2. New York – $6,860,000
  3. Florida – $5,400,000
  4. Texas – $4,580,000
  5. Pennsylvania – $4,250,000
  6. North Carolina – $3,580,000
  7. New Jersey – $3,300,000
  8. Illinois – $3,110,000
  9. Georgia – $3,000,000
  10. Michigan – $2,810,000

You can view the complete list by states by clicking here

As expected, there’s a strong correlation between fraud losses, fraud reports, and population sizes. States with larger populations tend to have both more COVID-19 fraud reports and greater total losses.

 

Other Types Of Fraud To Watch Out For:

  • Identity Theft is another huge concern during the pandemic in all forms of payments, at least according to the FTC. Some states that have previously ranked “lower” on the FTC fraud reports have now moved to the top of the list, one of those states being Hawaii. Hawaii, in 2019, ranked 33rd for identity theft, however, in 2020 is ranking number one but when you break it down and look at it by population Hawaii actually ranks at number 18.
  • Online Shopping and Travel Scams have also drawn some attention during the pandemic, for various reasons, some of the most common COVID-19 scams are products or services bought online. Alarmingly although most common, in comparison Travel and vacations, have actually caused the most fraud losses ($35.48 million travel vs. $14.17 million online shopping) Phone call scams are most prevalent in this area, however email scams have shown to “net” more losses.

 

What Is The Most Common Payment Method in COVID-19 Fraud?

If you guessed credit cards, you guessed wrong. If you consider the fact that the most convenient form of payment is indeed a credit card, it makes it safe to assume credit cards are the most common payment methods used on COVID-19 or Stimulus fraud reports, but let’s take a look at the data to uncover the culprit. A whopping 8,032 cases were reported as the payment method on these reports, compared to the 4,468 cases using debits from bank accounts. This means debits from bank accounts were the third-largest payment method used and reported as fraud.

The most surprising and most common method is the Money wire payment method. Money wires resulted in $24.64 million consumers lost, which is very large in comparison to the $11.98 million lost through credit card payments. So a good rule of thumb to remember, Money wiring, while highly convenient is one of the toughest payment methods to get back once you have completed your transaction, even if it “wasn’t you”.

 

What Age Group Was Targeted Most?

The Ascent’s Study shows that the age group that reported the most losses in dollars is the 40-49-year-old age group. However, we can see by looking at the rest of the data provided by The Ascent, a Motley Fool Company, that the scam artists did not have a preference on age group, while some age groups had a large amount taken from them, you can see there wasn’t an age group they didn’t target.

  1. 40-49 years – $12,000
  2. 50-59 years – $10,300
  3. 60-69 years – $9,400
  4. 30-39 years – $9,000
  5. 70-79 years – $5,200
  6. 20-29 years – $4,300
  7. 80 years and over  – $2,600
  8. 19 years and under – $500

 

So no matter your age, your experience with telemarketers, or the internet – whether it be an email or a website, be aware of COVID-19 fraud and Stimulus fraud, and that scammers are always changing their tactics. As we can see scammers will be extremely creative to get what they want, your money. Make sure you are always aware of who you are speaking to on the phone(no pre-recorded voices), and or in email. Also, check out more of these tips from The Ascent on how to stay protected during this COVID-19 fraud pandemic. 

Lowcards.com is one safe way to compare and choose a credit card. You can get yours here!

Sources

  1. Federal Trade Commission (2020). “Consumer Sentinel Network Data Book 2019.”
  2. Federal Trade Commission (2020). “Coronavirus Advice for Consumers.”
  3. Federal Trade Commission (2020). “COVID-19 and Stimulus Reports.”
  4. Federal Trade Commission (2020). “Getting stimulus checks from car dealerships? Nope.
  5. Worldometer (2020). “United States Coronavirus.”
  6. The Ascent – A Motley Fool Company (2020). “COVID-19 Fraud Statistics.”

The information contained within this article was accurate as of August 14, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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sara

About Sara Saucier

Sara Saucier is the Brand Coordinator at LowCards.com. Sara works with credit card issuers and our editorial team to make sure the cards you see on our website are compliant as well as ensure we are always bringing you adequate information and compelling articles. She has worked in digital marketing for over two years and has extensive social media expertise to bring to LowCards.com, with some experience in personal finance, Sara is ready to bring you the most engaging and up to date credit card information. You can reach Sara via email at