Blog  |  May 15, 2020

How Your Financial Institution Can Help Customers Beat COVID-19 Scams

By now, you’ve probably heard some of the horror stories about conmen preying upon desperate bystanders in the wake of the COVID-19 pandemic. Scams capitalizing on the Coronavirus crisis run the gamut from selling fake medical supplies to blocking students from accessing e-learning portals. Anyone could fall victim, whether a member of a government agency, a homeschooling parent, even a patient infected by the disease. And unfortunately, these scams often work.

Opportunistic and adaptable at their core, fraudsters feed on emotion – in this instance the fear and panic outbreak running parallel to the virus itself. These scams differ from previous disaster-related crimes in that more people have a personal investment otherwise absent during previous global catastrophes. You or someone you know may be affected. Economic impacts like job loss, businesses operating on thin margins and stock market volatility contribute to health concerns, thereby creating the perfect environment for scammers to exploit panic. However, you can help your customers avoid and overcome this fraudulent contagion by learning more, following some best practices and partnering with your customers to combat financial crime.

Types of COVID-19 Scams

The first step to inoculating your customers from any scam is familiarity with the fraud landscape, not to increase anxiety, but to help them spot, avoid and report scams. That way you can help your customers keep the bad guys out of their accounts, safeguard their sensitive information and avoid panic. For the most part, Coronavirus scams imitate many other types of fraud. They’re typically broken into three major categories.

  • Product Scams: Accounts of people purchasing fake goods and services related to the pandemic have surged in recent weeks. Robocalls, social media posts, emails and websites have claimed to have testing kits, protective pills, medical masks and even immunity pills. Fraudsters attempt to predict a good or service the public will clamor for, and then pretend to have it for a fee. Since they have no intention of delivering the goods, consumers should be cautious whenever someone on social media, online or over the phone claims to have something they need. If it seems too good to be true, it probably is. Similarly, a “miracle drug” hasn’t been covered by news outlets or local health officials and is usually a red flag.
  • Investment Scams: Just as many fake products have been “sold,” many fake startups and websites have sprouted over the past weeks. This type of scam pretends to be part of the solution, for instance a company researching COVID-19 and promising a cure and plentiful returns on investment. Investment scams also include crowdfunding scams that might seem to fund groups or individuals in need whether due to layoff or health concerns. With any of these, consumers should refer to experts and trusted contacts to verify before investing.
  • Imposter Scams: Often done with sophisticated phishing techniques, many criminals have impersonated other reputable people or organizations. For example, unsolicited emails seemingly from the Centers for Disease Control (CDC), World Health Organization (WHO), a local medical organization or a bank may request funds or other sensitive information. Generally, these scams solicit donations, steal personal information (such as medical or financial records) and/or distribute malware after one wrong click. Such websites as Netflix and Zoom have stood out as clear examples of imposter scams from a Coronavirus standpoint. Victims may receive an email reporting their account locked or requiring reentry of financial information. Whether accessing entertainment, work or e-learning assignments, consumers should be vigilant against potential imposter scams.

Tips to Protect Your Customers

In addition to awareness, your customers can employ the following strategies to ensure their safety if they spot anything suspicious or concerning:

  • Breathe In: Since these scams aim to manipulate emotions, take a moment before clicking any links or responding to random emails or social media. Be cautious, but don’t let panic take over. Is it too good to be true? Does it come from a reliable source, verified when hovering over the link? Are there any red flags to pick up on that don’t feel quite right? Your customers should consider all these questions before letting stress set in and making decisions that might put them at risk.
  • Reach Out: Even though many people are not going into the office and interacting daily with coworkers, social connections remain important. They should consider a phone call to check with coworkers if something seems suspicious, and refer to trusted news sources to determine a claim’s legitimacy. If your customers receive a notification or request, they should contact the school, organization or neighbor directly first. And as always, customers should communicate with your financial institution and refer to your expertise on the matter.
  • Act Accordingly: Once your customers have determined whether a claim is legitimate, they can feel a bit more comfortable acting. Whether they need to contact your financial institution and authorities, or can freely donate to someone in need, they can be more confident of making the right decision once the first two steps are completed.

It’s a good idea to follow these guidelines under normal circumstances. But the surge of fraud related to the Coronavirus makes these strategies all the more critical.

Partner Up to Combat Scams

Although your customers may feel uncertain about the virus and its economic impact, remember that social distancing doesn’t have to mean financial isolation. Scammers want victims to feel scared and alone, so a creating a strong partnership with your customers makes all the difference when combatting financial fraud of any kind. Your financial institution has experience with fraudulent behavior and fraud detection, so allow your customers to draw from that expertise with these tips.

  • Communicate: Whether your customers have seen a scam or would simply like to know more, ensure open lines of communication, so they can contact your financial institution for advice. Many financial institutions have already put together watchlists for their customers, but consumers reporting suspicious activity can help spread awareness and prevent others in your area from falling prey. In addition to providing assistance during this trying time, your financial institution can also direct consumers to authorities and help with the transition into recovery mode in the event of victimization.
  • Refer to Your Website: Financial institutions have been providing updates with their policies in light of COVID-19, from closures and hours to listing suspicious activity. If your financial institution has not already posted a watchlist of fraudulent behavior, consider creating one or instruct your customers to contact you directly with questions.
  • Set Up Alerts in Digital Transaction Environment: If your customers are transacting from a distance during the pandemic, remember to encourage them to set up alerts to notify them of withdrawals. Doing so will help them notice suspicious behavior as soon as it happens, and it’s a useful addition to financial institution’s suspicious activity reports.

COVID-19 has generated a great deal of anxiety and stress for many across the globe. But with a level head and strategic collaboration with financial professionals, your customers can overcome that anxiety and vaccinate themselves from fraud.

For more information about fighting financial fraud, or other virus-related topics, check out our  COVID-19 Crisis Management Roundtable.

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