Americans lost more than $211 million to Covid-19 scams and stimulus payment fraud, according to the Federal Trade Commission. Since January, the agency has received more than 275,600 complaints.
While fraud activity has fallen from the highs recorded earlier this year, it is likely to pick up again as President Donald Trump has signed the $900 billion pandemic aid package, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021.
That’s because the legislation includes provisions for a second round of incentive payments, up to $600 per person, including dependent children under 17, if you’re an individual who earned less than $75,000 in 2019 ($150,000 for married couples who jointly to file a request). Stimulus payments begin to taper off if you earn more than that, and stop completely for those with adjusted gross incomes of $87,000 or more ($174,000 for married couples).
The IRS is expected to initiate incentive payment direct deposits by Thursday and send paper checks and debit cards by Jan. 15. And while Trump signed the aid package a little later than expected, a senior official told CNBC on Monday that the payments will be made on the same timeline.
But the lingering uncertainty surrounding the second round of stimulus payments creates the “perfect storm for fraudsters trying to make an unfair dollar,” said Florida attorney general Ashley Moody. On Monday, Moody’s office posted a message warning the public of the increased potential for scams.
“Scammers are always looking for new opportunities, like passing another round of federal incentives, to defraud consumers,” Moody says.
Here are five common red flags that experts say can signal a stimulus control scam.
1. Cold Calls or Emails
Spoofing technology has made it easier than ever for scammers to impersonate anyone, including government agencies. To protect yourself, most experts advise consumers not to pick up calls from unfamiliar phone numbers – have them leave a voicemail for further investigation.
“I would be very wary of any incoming emails or phone calls purporting to be from the IRS, the Treasury Department, a state unemployment benefit agency, etc.,” said Ted Rossman, a credit industry analyst at CreditCards.com. If you get a phone call or message that you believe may be from a government agency, start a separate means of communication, Rossman says. For example, call the agency back at a number you trust or listed on their official site, rather than answering directly to a phone call or email.
If you answer a call and it comes to your stimulus payment, keep in mind that US government agencies do not ask you to pay anything upfront to receive your money. ‘Anyone who does that is a scammer’ writes Jennifer Leach, associate director for the FTC’s consumer and business education division.
In addition, government agencies “will not call, text, email, or contact you on social media to ask for your Social Security, bank account, or credit card number,” Leach says. Again, if you receive messages asking for this information, it is likely a scam.
2. Messages asking to “verify” or provide information
When it comes to emails and text messages, consumers should be wary of anyone who has instructions encouraging you to click a link to “apply for benefits,” according to the Better Business Bureau. Also, be wary of messages asking you to “verify” your personal information, according to the Moody’s office.
“The IRS will not call, text, or email anyone to verify their information,” the statement said Identity Theft Resource Center wrote a warning about stimulus check scams in a recent blog.
The BBB Scam Tracker has discovered that a common stimulus check scam occurs when you receive an email or message asking you to click a link that takes you to a bogus application to fill out to “make sure that you will receive all payments due to you”. But this is usually just a way for fraudsters to obtain your personal information and exposes you to the potential for identity theft, the Bureau wrote in a warning published last week.
3. High-Pressure Actions
Another great tip that a call or message is from a scammer is if they say they need sensitive information right away, according to the Moody’s office. It’s usually a red flag if something needs to be done immediately or if there’s a danger of losing your stimulus payment if action isn’t taken immediately.
“Take a breather,” recommends Ron Schlecht, managing partner at cybersecurity firm BTB security. Don’t be rushed into buying or giving away information, Schlecht told CNBC Make It earlier this year.
4. There is a fee
A common scam that cropped up during the latest round of stimulus checks is that fraudsters offer faster payments or even extra money for a small “processing fee” — usually using a prepaid debit or gift card, according to the BBB Scam Tracker.
But according to Leach of the FTC, there’s no such thing as getting your money early, even by paying a fee. “Anyone who says they can hook you up now (or soon) is lying and is a scammer,” she says.
There is also an increase in the supply of cash advances at very high interest rates that add up to much higher than the stimulus check, said Quentin Rhoads-Herrera, director of professional services at cybersecurity firm CRITICAL START.
“If someone offers a cash advance on your stimulus check, you should be well aware of the underlying terms of that offer,” Rhoads-Herrera says.