As the COVID-19 pandemic continues to impact our lives in a multitude of ways, scammers are also finding new methods to try to take advantage of the situation.
Nigerian unemployment scam
As millions of Americans apply for unemployment after being laid off from their jobs due to the pandemic, authorities identified a criminal ring in Nigeria that is stealing millions of dollars n unemployment benefits -- sometimes with the help of unwitting Americans themselves.
The Secret Service reports that scammers are using information obtained from data breaches and recent spike in payroll data theft earlier this year to apply for unemployment benefits in people's names before they have a chance to do so. In some cases, they're filing under the names of people still employed. Scammers are also redirecting the one-time stimulus payments to their own pockets.
The Secret Service says 13 states have been targeted, with Washington and Massachusetts taking the biggest hits. But the scammers are using people, often elderly, from all over the nation -- including here in the Sacramento area -- to launder the funds. Here's how they do it. They befriend people through social media and establish "romantic" relationships or offer jobs to people looking for any source of income. When they obtain the funds through fraud, they direct the money to their social media friend and ask them to withdraw the funds from their account and send it to the scammer.
What you can do
- Check your credit report to find any suspicious activity, such as accounts opened in your name you don't know about.
- Be on alert for job offers that sound too good to be true. Research job offers you may come across online or that land in your email in box.
- If someone offers to deposit money into your account and asks you to wire it back to them, don't. It's a scam and the scammer is trying to use you as a mule to help launder the funds.
Other financial scams
The California Department of Business Oversight (DBO) recently released a consumer alert detailing some of these new scams. Some are repeats of what we saw during the 2008 Great Recession and others have a specific COVID-19 pandemic twist.
If you have been a victim of a scam or want to report one, you can do so through the DBO at https://dbo.ca.gov/file-a-complaint/.
Learn about other scams here.
Loan modification and foreclosure scams
These scams were prevalent during the Great Recession, and now they’re back for COVID-19. Be on the lookout for these common scams.
Deed-transferring to third-party
The pitch: Scammers tell homeowners that by transferring the deed to their home to a third party the homeowner is no longer responsible for making their mortgage payments. They often will ask for up-front fees to make the transfer and promise to rent back the house to the homeowner until the homeowner can buy the house back.
The reality: This is not true. Transferring a title does not relieve the borrower of responsibility for making their mortgage payments.
What to do instead: If you are having a difficult time making your mortgage payments or facing foreclosure, contact your mortgage servicer directly to discuss options. Do not go through a third party and do not sign your property away.
Intentional default
The pitch: Scammers urge homeowners not to pay their mortgage in order to get a loan modification arranged by the scammer.
The reality: Loan modifications are always determined by the mortgage loan servicer, no one else.
What to do instead: If you’re having difficulty making your mortgage payments, contact your mortgage servicer directly or contact a HUD certified counselor at (888) 995-4673.
Have a SAFE mortgage? If you have a mortgage with SAFE and want to explore options to help you through this time, contact our mortgage servicer at (800) 701-4115 or emailing lossmitinquiry@DMIcorp.com
Lending scams
Advance fee scams
The pitch: Scammers promise loans if you pay a substantial fee first. These scams may promise loan modification services, mortgage forbearance services, or other loan relief for an upfront fee.
The reality: Only the company you have a loan with or mortgage servicing companies can make changes to your loan conditions, including your payment plan. Do not pay anyone asking for up-front fees for loan modification services of any kinds. These fees are not legal in California.
What to do instead: Only borrow money from a reputable financial institution such as a bank or credit union. You can verify whether a company is legitimate by contacting the DBO at 866-275-2677 or Ask.DBO@dbo.ca.gov.
Cryptocurrency scams
The FBI has issued a warning that they are seeing a number of scams related to cryptocurrency that have been started in response to COVID-19. If you want to report a cryptocurrency scam, visit the FBI’s Internet Crime Complaint Center.
Blackmail attempts
Scammers have put a new twist on this old one in which they threaten to release information about you unless you pay them in cryptocurrency. Now they’re adding that they will release your information and infect your family with the coronavirus unless you pay.
Work from home scams
In this one scammers use you as a mule for an illegal money transmission. Here’s how it works. Scammers pose as employers and ask you to accept a donation directly into your own bank and then deposit the funds into a crypto kiosk. The FBI says the “donation” is likely stolen money and you’re helping the scammer launder it.
Treatment and equipment scams
Scammers are luring customers from trusted commerce websites to shady sites where they offer products they claim prevent COVID-19. These sites demand payment in cryptocurrency.
We all have a lot to worry about right now, and being a victim of scam shouldn’t be one. Take the time to research companies or people offering you financial schemes to ensure they’re legitimate. Be healthy and safe.
