Scams and identity fraud on the rise U.S. Attorney, FBI warn
While scams and identity fraud are nothing new, how they’re conducted is always evolving as thieves look to stay one step ahead of their victims. Recently, unsavory online schemes have taken on a new form in response to world events. This latest round of activity places the general population at increased economic risk.
If you know what to be aware of, you can avoid becoming a victim. Here are the details about what’s happening and what you can do to protect yourself.
Data shows that scams are on the rise
2020 has been a difficult year and, as a result, consumers have dramatically changed their patterns of behavior. More people are opting to stay at home and do their business online. Furthermore, government responses to problems include increased unemployment benefits, support for small businesses, and stimulus cash payments.
With these changes, criminals have identified multiple opportunities for fraud. They’ve developed a broad scope of activities based on the new sources of government-provided economic support, shifting consumer purchasing habits, and increased public reliance on virtual transactions to pay for what they needed.
The FBI has taken note. According to the Calvin A. Shivers, Assistant Director of the agency’s Criminal Investigative Division,
“As of May 28, 2020, the Internet Crime Complaint Center (IC3) received nearly the same amount of complaints in 2020 (about 320,000) as they had for the entirety of 2019 (about 400,000).”
Four horsemen of fraudulent activity
In response to the problems, the FBI also set up a new working group with members from all 56 agency field offices. A lot of the activity that they’re seeing to date can be categorized into four main areas:
- Illicit Requests To Pay Upfront: The FBI has identified multiple cases where unwary consumers looking to purchase PPE, in-demand items like paper towels or hand sanitizer, or just about any good, are asked to pay before they receive their items. Once they make the payment, consumers don’t see most, if not all, of what they paid for.
- False Applications For Government Support Programs: While the government looked to provide economic support to people impacted by current economic circumstances, undeserving fraudsters looked for ways to take some of that money for themselves. Some of them were even able to obtain employer identification numbers from small businesses and use them to apply for Paycheck Protection Program loans.
- Impersonating CEO’s/Check Signers: Some criminals have been impersonating company CEOs through spoofed emails, closely imitated documents, and use of personal identifiable information. Once they’ve established credibility with a financial institution, the imitators request a release of funds to their account. This has been used in a range of ways including false payroll transactions, the release of funds for pricey construction projects to a bogus recipient, and the release of funds from government-sponsored business support programs to a false account.
- Misuse Of Virtual Transactions: Now more than ever before, thieves are using online transaction platforms to launder their stolen money. When they purchase items anonymously online, it becomes more difficult for officials to follow a transaction path and identify the funds as stolen assets. In addition, scammers also unwittingly employ some honest individuals who are intending to work from home as “money mules” to help move illicitly acquired money through the system. As part of working from home, they’re asked to receive significant amounts of money into personal bank accounts and then to transfer the funds through wire transfer, ACH, or money service businesses.
How to protect yourself
While many of these scams may appear to be new, the structure for the scams remains the same as its been for years. That’s good news, because it means that tried-and-true ways to keep yourself protected still work.
One of the first safety steps you can take is to be careful with both business and personal levels of sensitive information. Keep things like employee identification numbers, social security numbers, credit card numbers, drivers’ license information, passwords, answers to password retrieval questions, and bank account information as secure as possible. If someone requests these numbers, be sure that you’ve verified who they are and why they need what they’re asking for.
In addition to keeping information safe, be sure to carefully evaluate any email requests for funding or information. Be aware that requests coming from scammers can look very similar to legitimate requests, even going so far as to use logos and email names from legitimate sources. As you evaluate these requests, be sure to notice the URL address connected to an email. Businesses should also consider adding a legitimate, two-step request approval process in place to catch illicit requests before they become a problem.
Another, powerful step to take is to sign up for an identity theft monitoring service. These services can monitor individual and business accounts for any sign of suspicious activity. If there’s a problem, you’ll be notified and can address the situation before too much damage is done. Costs range from free fraud alerts and credit checks you can do yourself with the major credit bureaus, to higher price tags for fraud insurance programs that cover losses in the event of a problem.