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Don’t Fall for It

Peter Mallouk  |  April 24, 2020

IN EVERY CRISIS, good people do great things and bad people, well, they do some really, really bad things. This article is about protecting yourself from the bad people. Never in my career have I seen so many scams in motion all at once.

Crooks tend to step up their game at times of crisis: Stress, change and misinformation make for the perfect backdrop, as they try to separate you from your money. Here’s a rundown of six current scams, and how to spot and avoid them. Note that nearly all of them are simply tailored versions of scams that take place year-round.

Scam No. 1: “I need your help right now but can’t talk to you on the phone.”

Recently, I received an email from a business colleague asking if I could reach out to him. I emailed back setting a time that I’d be available to talk. I then received back the following message:

“I have a virtual call being set up at 1 p.m. I am leading a committee ensuring the procurement of test kits, masks and ventilators to support hard-hit cities and other countries. I have just got off the phone with a vendor in Kansas, hence my reaching out to you. Here is the thing: Peter, we are looking to remit funds to said vendor to cover the balance for these materials and it is past due. For this reason, I thought I would run it by you and see if you could have your bank wire to the company on our behalf. We will reimburse you the sum on or before Thursday. Is this something you can do for us as a show of support? It would be greatly appreciated. Kindly write back and let me know.”

Total scam. Never, ever send funds to anyone based on an email. Always talk to the person first. There are many versions of this scam, from asking for money to asking you to purchase gift cards on their behalf. All have three things in common:

  • The messages will come from people you know who have had their email hacked, or appear to come from someone you know but, in fact, come from someone using a slightly altered email address.
  • They will have a sense of urgency.
  • The sender won’t be available to talk to you.

How do you spot these scams? First, look for typos, strange spacing and wording that doesn’t sound like it comes from the sender. Second, check the email address. Often it will look very similar to the address of someone you know, but with maybe one letter changed. Third, always call the sender. If the person can’t talk, don’t send anything.

Tip: If someone asks in an email for a donation in cash, gift card or wire transfer, don’t do it without verification.

Scam No. 2: The text message from a governmental agency.

The Department of Justice is warning that a version of this scam is currently running rampant. In an example of this rip-off, scammers email or text you a link to take a coronavirus preparedness test that appears as if it were sent by the Department of Health and Human Services. Similar scams have been reported with fake links from organizations such as the Centers for Disease Control and the World Health Organization. These links instead contain a computer virus that can take over your computer or leave the predator to lie in wait to try to pull a scam on you later.

Know that no government agency is going to email or text you a link to get information. Typical scams similar to this that operate year-round involve emails or calls from the IRS or the Social Security Administration. Fully 100% of the time, the answer is to delete the message.

Tip: Never click on email or text links from sources you don’t know.

Scam No. 3: The fake charity.

Get ready for calls from the “COVID-19 Give Back Fund” and the “Combating Coronavirus Fund.” Scammers are creating fake charities to take advantage of everyone’s desire to help. If you haven’t heard of the charity before, don’t know anyone affiliated with it and can’t confirm it’s reputable, don’t give. There are plenty of ways to give that are easy to validate.

Tip: Do your homework when it comes to donations, whether through charities or crowdfunding websites. Don’t let anyone rush you into making a donation.

Scam No. 4: Money for medical treatment.

People are receiving calls from scammers posing as health care providers who have recently treated a loved one for COVID-19—and are now demanding payment. Just hang up. No one is going to call you for payment.

Tip: A legitimate medical provider would never ask a patient’s friend or relative for payment via a phone call.

Scam No. 5: Fees to access stimulus and CARES Act benefits.

With this scam, someone calls or emails you offering you benefits under one of the government’s new programs. The catch? They need you to send them some funds in advance for “filing fees” or other costs. In another version of this scam, crooks will ask you to click on a link (here we go again) to access benefits. In the most sophisticated version of the scam, crooks posing as representatives of a governmental agency will ask for your bank information, so they can transfer your stimulus check to you.

Tip: Never respond to anything like this or click any links. And never, ever provide anyone your banking information without verifying with a phone call that you know the source.

Scam No. 6: Social Security fraud.

Social Security scams happen year-round. Now is no different. On March 27, the Social Security Administration issued a warning about fraudulent letters threatening suspension of Social Security benefits due to COVID-19 or coronavirus-related closure of Social Security offices.

Social Security beneficiaries have received letters through the mail stating their payments will be suspended or discontinued unless they call the phone number referenced in the letter. The agency said scammers may then mislead beneficiaries into providing personal information or payment via retail gift cards, wire transfers, internet currency or by mailing cash. The scammers will claim this is required to maintain regular benefit payments during this period of COVID-19 office closures.

Tip: No one from the government will ever ask you for your banking information or credit card information, and they certainly won’t ask for gift cards or payment via bitcoin.

Peter Mallouk is president and chief investment officer of Creative Planning in Overland Park, Kansas. His previous articles were Thank Uncle Sam and An Ill Wind. Peter and HumbleDollar’s editor, Jonathan Clements, together host a monthly podcast. Follow Peter on Twitter @PeterMallouk.

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