New, improved pandemic scams
Friday, March 19, 2021 @ 11:17 AM | By Jennifer Lynch and Margot Mary Davis
|Margot Mary Davis|
Fraud often increases during economic downturns due to a variety of reasons. Individuals are more likely to be stressed and therefore fall for scams. With respect to fraud within a corporation, companies might place pressure on employees to meet financial targets which leads to some employees falsifying financial statements, and many corporations make cutbacks to anti-fraud departments. COVID-19, specifically, creates an environment where individuals could accept fraudulent claims. Since COVID-19 is a novel virus, with much unknown about it, people might fall for questionable “treatments” that seem “scientific.”
Individuals and organizations are probably wondering what scams are out there and how to best protect themselves from these scams. Below, we describe some scams, how one can reduce their chances of becoming a victim of fraud and proactive steps people can take to fight scams.
With reports of increasing unemployment and poverty due to the pandemic, many generous people want to help out. Some people also want to donate to COVID-19 research. Many scam artists are taking advantage of this; the FBI notes that many scammers are soliciting donations from well-meaning individuals or organizations. Fraudsters will falsely claim that donated money is going to COVID research or assist individuals with COVID-19 and their families. In fact, this money and your personal information is only going to the scam artist. COVID-19 charity scams can be door-to-door scams, telephone scams or phishing campaigns.
Several trademarks are associated with these particular scams. These charities often use guilt-inducing techniques and tug on people’s heartstrings. They will use names that are similar to legitimate charities and request that people pay via odd methods like cash, gift cards or wire transfers. Additionally, they often state that they are “new” charities developed to assist with a specific problem.
If you are faced with a suspect request for a donation, do not give money immediately. You are under no obligation to donate. Legitimate charities will respect the fact. Never give out personal information over the phone. Additionally, never click on links in suspicious e-mails or download attachments from such e-mails. If an e-mail purports to be from a charity, you should open a new Google page and type in the name manually.
You should confirm that the charity is registered. While registered charities are not perfect, it is at least proof that a charity is not a scam. To confirm that a charity is registered, you can look up the charity on the CRA’s “List of Charities-basic search” feature. Additionally, the Better Business Bureau provides reviews for charities and businesses. It is always a helpful resource to consult.
COVID-19 ‘testing,’ ‘treatments,’ ‘cures’
Fake drugs, and fake testing for medical conditions have been a long present threat. Counterfeit drugs are estimated to be $200 billion a year industry and fake malaria drugs have been linked to 116,000 deaths in Sub-Saharan Africa. Fake drugs are ineffective at best and dangerous, even lethal, at worse. Such drugs often contain excessive amounts of certain active ingredients or contain useless ingredients.
With the advent of COVID-19, producers of fake medicines and fake tests have found a new condition to exploit. Since March 2020, the number of websites offering “treatments,” or “cures” for COVID-19 and at-home testing kits have exploded. Additionally, some vendors sell these goods on social media sites. While some of the treatments are clearly garbage, like selling bottled animal urine to cure COVID-19, other scams are more sophisticated. Scammers might say that the “treatments” are approved in other countries or in the testing phase. They might replicate the look of actual medicine bottles when bottling their product.
There are several ways to avoid becoming victims of this scam. You should never purchase drugs or medical goods from sellers on social media. Also, be wary of any website that offers N-95 masks, disinfectants or PPE. Currently, the FDA has not approved any at-home COVID-19 testing kits and in Canada, only health-care providers can perform tests. The government of Canada’s website lists approved vaccines, approved disinfectants and authorized treatments. It is always a worthwhile website to review.
Stay tuned for our next article where we describe some other scams and how to combat fraudsters.
Jennifer Lynch is an accomplished forensic accountant and business owner. Jennifer is a Chartered Professional Accountant, Certified Management Accountant and a Certified Fraud Examiner who has a reputation for expertise, quality service to clients and professionalism. You can reach her on LinkedIn. Margot Mary Davis is a 2018 Ontario call to the bar. She is interested in policy issues surrounding law like combating counterfeit goods and developing sui generis policies for orphan drugs. She is also a published author.
Photo credit / Mark Astakhov ISTOCKPHOTO.COM
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