October 21st, 2020

Consumer Fraud in the Age of COVID-19

As winter approaches and the population shifts to indoor activities, COVID-19 cases are again on the rise. So are phone scams and fraud. 

According to the FTC, fraudsters have bilked Americans of $145 million in COVID-19 scams this year. While the average loss was $300 per person, seniors at least 80 years old lost twice as much. Add to that the inability of contact tracers to get people to answer the phone due to robocalling and scams, and it’s clear the very health and well-being of our nation is at risk. 

When it comes to COVID, scammers get an “A” for creativity. There’s the stolen stimulus checks and unemployment benefits and the peddling of fake treatments, all while charities are doing grave damage to some of our most vulnerable populations. One of the greatest dangers, however, is the inability for contact tracers to get calls through because people are afraid to answer the phone.

COVID scams have become so popular that the Better Business Bureau, the FBI, and the Federal Trade Commission have each created special websites to educate the public. Regulatory agencies, government, CSPs, and businesses are working together to combat this scourge of robocalling, call spoofing, and fraud to restore trust in the phone channel. 

The year of COVID lit up phone lines.
As the pandemic took root last spring, some hospitals were overrun with infected patients. Doctors, nurses, and administrators lacking real-time data bobbled their way through with calls and texts to find beds and supplies among their contacts. A California’s hospital association sent a plea to executives asking which facilities had open beds, and reported the state was averaging 40 calls to place just one of their COVID patients in need. 

Around the country, health systems reported similar issues, and relied on their call networks to get by. Now, the country is facing another surge in cases, with over 30 states reporting a rise in cases, reactivating the threat of overwhelmed hospital systems. 
In spite of the risk of scams, one thing is clear: the phone remains a vital communications channel. While email has an open rate of just 20%, phone calls have an answer rate averaging 44%, and text messages have an open rate as high as 98%.  

And, according to our recent survey of executives, 71% of those in the healthcare industry said they increased their outbound calls in the past six months. For many reasons, in the year of COVID, the phone, especially mobile, has become a lifeline for health care providers. 

Health-related scams take aim at the most vulnerable.
In the midst of a global disaster that hits close to home for many, people’s fears and uncertainties are easy prey for sophisticated scammers. In the spring, scams around COVID testing were the first wave. Consumers wary of phishing scams has stymied coronavirus contact-tracing efforts nationwide to the extent that elected leaders are pleading with their constituents to answer their phones. Some consumers were hit with messages promising COVID test results even if they hadn’t taken a test, while others received offers of fake testing services… for a fee. In one Minnesota town, an outbreak on a high school football team led to an area-wide scam by text and email to attempt to steal personal data for COVID testing.

In Louisiana, contact tracers were able to reach 66 percent of identified cases by phone from May to September, and resorted to snail-mail letters with everyone who didn’t take their calls. Other state health departments took alternative routes to reach people possible infected. In DC, that meant visiting people in person. Even when calls from the district’s health department were clearly identified as “DC COVID 19 Team,” answer rates were low, inciting door-to-door notification. In Philadelphia, the health department texted people who tested positive to alert them a phone call was coming which helped subsequent call response. 
Other hoaxes and scams tempt those desperate for protection or a cure. Fraudsters selling blood and saliva samples to bolster immunity is one example. Hundreds of sites, mostly phishing operations, have emerged to tout unproven drugs, and other experimental or quack cures. 

Beyond healthcare fraud, thieves take aim at citizen well-being.
As our nation faces competing priorities, coronavirus, wildfires, hurricanes, elections, criminals are finding creative and compelling ways to dupe donors and the very causes they want to help.  The gamut of scams defies the imagination.

Many reported scams push notifications of job or unemployment benefits loss, or fake SBA loans. As citizens navigate the unemployment and welfare procedures, and small businesses struggle with the Payroll Protection Program and Economic Injury Disaster Loan processes, they face a barrage of fraudsters routinely spoofing the very agencies that provide these services, using recognizable names and logos and sharing personal information that gets noticed. 

From Alaska to Virginia, another phone scam runs rampant, this one “from” the Social Security Administration claiming the recipient’s social security number has been suspended due to fraudulent activity and again extorting payment to reinstate. 

Another of the top 10 COVID 19 scams prevalent today? The donation scam. Well-meaning citizens eager to help can also be easy to deceive. Fake, but very convincing charities proliferate in times of great need. The FTC warns fake charities use names that sound similar to legitimate nonprofits to solicit donations. 

One multimillion-dollar con promised aid to homeless vets and former law enforcement officers through the use of sham charities to gather donations. As the holidays approach, these scams will proliferate as fraudsters know more people tend to donate at year end, 

Regulators and industry answer the call for robocall mitigation.
Of course, it’s not just government being spoofed. 

While all this is happening, enterprises must contend with legitimate calls being flagged by phone companies as spam, a reality until all carriers across the ecosystem implement STIR/SHAKEN call authentication standards, and other robocall mitigation solutions. Vetting is a key element in this effort, to ensure we keep scammers, spoofers, and fraudsters out of the calling ecosystem. That requires an all-in commitment by regulators, enterprises, and service providers alike. 

Neustar has long worked with government, CSPs, and enterprises to mitigate fraud across the call ecosystem. As an approved Certification Authority and co-author of the STIR certificate management standards, Neustar plays an integral role in the governance structure for the Calling Number Verification Service to mitigate illegal robocalling and call spoofing. To learn more, visit our Trusted Call Resource Center and learn about our Robocall Mitigation solution.

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