Scam Alert: Coronavirus Creates “Perfect Storm” for Scammers
The COVID-19 (coronavirus) crisis is forcing people to distance themselves from others, work remotely, and spend time indoors and online. While social distancing is a good health practice to reduce the spread of the coronavirus, it may be helping scammers. Research from the Better Business Bureau, the FINRA Investor Education Foundation, and the Stanford Center on Longevity found that people are more likely to lose money to a scam when they are socially or physically isolated from others, if they are actively engaging online, and if they are financially vulnerable (BBB.org/ExposedtoScams).
“According to our research, social isolation is a key risk factor for susceptibility to scams, as is financial vulnerability,” said Melissa Lanning Trumpower, executive director of the BBB Institute for Marketplace Trust, BBB’s foundation that conducted the research. “Add increased time spent online and coronavirus creates the ‘perfect storm’ for scammers, because all three of these factors have increased dramatically.”
As bricks-and-mortar businesses close or curtail services and the financial markets experience a high level of volatility, many consumers are left to wonder if they will have a job or an immediate way to provide for their loved ones. As people turn to the Internet seeking new or temporary employment, they are also at increased risk of employment scams. BBB research deemed employment scams the riskiest scams of 2019, making up 9.3 percent of all scams reported and a median dollar loss of $1,500.
Despite these factors, there are steps everyone can take to protect themselves and their family from losing money and compromising personal information.
Don’t be afraid to contact a friend, or a company or organization you trust for advice.
Isolation is a risk factor for scams. Feelings of loneliness were associated with being more likely to engage with and lose money to scammers. This was especially true when the individual felt he or she lacked companionship and was isolated from loved ones, according to Exposed to Scams: What Separates Victims from Non-victims.
Fact: Scammers will try to isolate their victims.
Before clicking a link or sharing personal information online, stop, pause, and research the company or person. People are more likely to lose money to scams perpetrated online. According to the 2019 BBB Scam Tracker Risk Report, consumers who are approached online (email, website, social media, internet messaging, and online classifieds) are significantly more likely to report losing money.
Fact: A staggering 81.2 percent of consumers lost money to online purchase scams in 2019.