Americans are starting to receive their $1,200 stimulus checks, which are meant to help them get by during the coronavirus pandemic. That influx of money is also attracting scammers and con artists.
As of April 14, people have already filed more than 15,000 coronavirus-related complaints, including more than 10,000 categorized as fraud, according to Federal Trade Commission data. Since January, consumers have collectively lost more than $13.4 million to such scams, with a median loss of $558 per person. Nearly 1 in 5 fraud reports involved unsolicited texts or calls, including impostors pretending to be a government entity.
Experts expect that number to jump as the government begins dispersing stimulus money. "With chaos comes an opportune time to take advantage of others," says Seattle-based CFP Jedidiah Collins, who runs the company Rookie to Veteran.
Here's what you need to know to protect yourself and your money from fraud.
Many of the scams are new takes on classic financial scams that use the pandemic and the economic impact payments as a hook. Scammers are hoping that people will be anxious enough about receiving their stimulus money quickly that they will take the bait before looking closely at the details.
Kim Cobb, a financial fraud expert and managing director of Texas-based Little GG Capital, says that most of the scams involve one of three tactics:
With the fake check ploy, scammers are creating fake stimulus checks for a larger amount than you are supposed to receive. Victims will then be notified that they were overpaid and that they need to send money back in the form of cash, gift cards, or money transfers.
When the fake check bounces, the victim will then be out that money, along with whatever they sent the scammers.
Video by Jason Armesto
Phishing is a digital attempt to trick you by purporting to be someone you know and trust. Scammers who send phishing emails are aiming to collect sensitive personal and financial information, like your Social Security number, bank account number, or login information and password. Impersonators who call pretending to be from an institution like your bank have the same goal.
Scammers then try to use the information you give them to drain accounts and perpetuate other kinds of fraud and identity theft.
"Never, ever give out your personal information," Cobb says.
Keep these four things in mind so you don't fall prey to fraudsters trying to get your stimulus money.
In the meantime, be vigilant and trust your instincts. If something feels not quite right, or too good to be true, it might well be a scam. And while fraud occurs all the time, Cobb recommends Americans be particularly wary during the pandemic. Scammers are "dialing it up," Cobb says, because for them, opportunities like this don't come around very often.
More from Grow: