Regulators and law enforcement agencies are warning investors to be aware of scams involving COVID-19 and related issues. Fraudsters often take advantage of turbulent times and national emergencies to prey on the vulnerable and take advantage of the gullible or greedy. And the senior population is often a primary target for scammers.
Near the outset of COVID-19’s entry into the U.S. consciousness, the Securities and Exchange Commission issued an Investor Alert warning investors about investment frauds relating to the outbreak. Similarly, the Financial Industry Regulatory Authority Inc. posted an Investor Tips with five questions to ask for “some financial peace of mind in the age of coronavirus,” including preparing to say no to potential coronavirus stock scams. And the Federal Trade Commission has posted multiple blogs on this issue, including here, here, and here.
As with any emergency that makes its way into the news, scammers use people’s fears against them. Here are a few of the new coronavirus-related scams targeting seniors and other vulnerable populations, as well as the population at large:
Coronavirus vaccine scams: Fraudsters are calling seniors claiming to have a coronavirus vaccination or preventative medicine and seeking an over-the-phone payment to reserve their dose.
Investments in research and development scams: Seniors are also receiving phone calls regarding investment opportunities in companies that are purportedly researching and developing a vaccine.
Government assistance scams: The FTC is warning the public about potential issues regarding government payouts, including potential scams related to fees or other charges, attempts to get personal information and the fact that there are currently no monies being paid out.
Home sanitation scam: Seniors are being targeted with phone or online offers to have their homes cleaned and sanitized, but these offers require prepayment.
Dangerous websites/email blasts: Law enforcement has noted an uptick in fake websites and emails with malicious attachments claiming to sell products that combat coronavirus or that have preventive tips and fake information about confirmed cases. These fraudulent websites may promote links that claim to let the user donate to victims or to offer resources and advice but that lead to malicious websites.
Cybersecurity concerns/malware attacks: Threats here include various coronavirus-themed domain names that infect visitor with malware, phishing emails from email addresses that mimic the CDC or WHO domains, and downloadable apps that purportedly offer coronavirus prevention content.
Sales pitches amid the stock market sell-off: And as with any significant decline in the markets, there are scammers seeking to take advantage of investors through promises of safety in precious metals or real estate, can’t-miss investment opportunities and more.
Seniors and other investors are encouraged to take a few commonsense precautions:
• Don't click on links from sources you do not know.
• Watch for emails purporting to be from the CDC or WHO. Beware of addresses that end in “.int” rather than the more common “.com” or “.org.”
• Ignore online or telephone offers regarding vaccination. At this point in time, no vaccination for the coronavirus exists.
• Before donating, research charities that claim to aid those in need as a result of the coronavirus. The FTC warns people to avoid solicitations for donations made by cash, gift card or money wire.
• With respect to “investment opportunities” that promise outlandish returns, be mindful of the old adage, “if something sounds to be good to true.”
• Report suspected scams to the authorities.
Seniors are encouraged to be mindful of fraudsters’ efforts to exploit this situation.
Josh Jones is an attorney with Bressler Amery & Ross and Taylor Anderson is a law clerk with the firm. Both are members of the firm’s senior and vulnerable investor group, which provides solutions and litigation support for investment advisers, broker-dealers and other financial institutions.
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