How COVID-19 is causing a rise in fraud

By Bruce Livesey

Although much of the world’s population is sitting idle at home binge-watching Netflix, fraudsters are hard at work taking advantage of the COVID-19 pandemic.

Nowadays everyone finds their inboxes filled with “emergency” emails suggesting we have to resolve problems with our bank, credit card or phone accounts by handing over private information or changing our passwords. Or we get alarming “emergency” robocalls purporting to be from government tax collectors, claiming we’re under investigation and must call some mysterious person to remedy the situation.

These sorts of scams have now evolved to take advantage of the pandemic.

Indeed, the Canadian Anti-Fraud Centre, which works for the RCMP, has put together a list of coronavirus-related scams, designed to play on people’s worst fears, including:

  • Cleaning or heating companies offering duct cleaning services or filters to protect from COVID-19 offering “special” air filters.
  • Local and provincial hydro/electrical power companies threatening to disconnect power for non-payment.
  • Centers for Disease Control and Prevention (CDC) the World Health Organization (WHO) offering fake lists for sale of COVID-19 infected people in your neighbourhood
  • Public Health Agency of Canada giving false results saying you have been tested positive for COVID-19 and tricking you into confirming your health card and credit card numbers for a prescription
  • Red Cross and other known charities offering free medical products (e.g. masks) for a donation.
  • Government departments sending out coronavirus-themed phishing emails tricking you into opening malicious attachments tricking you to reveal sensitive personal and financial details.
  • Private companies offering fake COVID-19 tests for sale.

But that’s not all. The RCMP is also seeing attempts to use the pandemic as cover to infect computers with malware. The victims of one such scheme received messages telling them they’ve been exposed to someone who’s tested positive for COVID-19 and asking them to fill out what looks like an Excel form. When users click to see the form, it infects their computers with a Trojan downloader that installs malicious files.

The Canadian Centre for Cyber Security has also seen attempts to scam Canadians over the pandemic.  “COVID-19 has presented cybercriminals and fraudsters with an effective lure to encourage victims to visit fake web sites, open email attachments and click on text-message links,” says Ryan Foreman, spokesman for the Centre. “These emails typically impersonate health organizations and can even pretend to be from the Government of Canada.”

Foreman says the Centre has taken down 2,000 websites trying to defraud Canadians — including some that pretended to belong to government organizations like the Public Health Agency of Canada, the Canada Revenue Agency (CRA) and Canada Border Services Agency.

The U.S. has been plagued with the same problems. COVID-19 scams have cost more than 18,000 Americans (US) $13.4 million since the beginning of the year, according to the Federal Trade Commission. The top fraud categories are related to travel and vacations, online shopping, bogus text messages and imposter scams. The IRS recently warned of scammers even trying to steal the stimulus checks it’s sending Americans to help them weather the pandemic.   Moreover, U.S. Federal Communications Commission Chairman Ajit Pai said he has seen the form of the scams evolve over the course of the pandemic.

There’s been a rise of scams that play on fears related to COVID-19, including recommending medical advice and offering fake products claiming to treat and prevent COVID-19.  Fraudsters have used on-line sales to blend in with legitimate customers, and already reports of increases in card testing attacks and buy online/pick up in-store fraud are mounting.

Then there are the bigger fish receiving large sums of government money without any oversight. In April, Canadian Prime Minister Justin Trudeau was pilloried in the House of Commons by opposition MPs over whether he would give bailout money to companies who use and abuse offshore tax havens. Trudeau initially dithered on this question before claiming he would not: “We will continue to ensure that those who need help will get it, but those who evade or avoid tax will not receive aid,” he said. Yet, a day after saying this, Trudeau was wavering on the matter again.

A 2017 investigation by the Toronto Star and Corporate Knights found Canada’s largest corporations avoided paying more than $10 billion in tax each year — mostly by using tax havens.

In the U.S., a (US) $500 billion federal aid package for companies and governments hurt by COVID-19 includes rules aimed at ensuring the money is used in ways that would help sustain the economy. But questions have been raised about whether those guardrails will prevent the kinds of abuses that have marked some corporate bailouts of the past. Loopholes lurk in the legislation.

A government watchdog and a panel appointed by Congress will monitor how the billions in aid are deployed and whether its corporate recipients are meeting the restrictions.

Yet President Donald Trump, after signing the relief package, undermined the oversight requirement by issuing a statement that seemed to reject the independence of a new inspector general’s office. He said he wouldn’t recognize the inspector general’s right to report to Congress without “presidential supervision.” Trump’s statement went on to dispute other aspects of the oversight rules, including that Congress should be consulted in the allocation of relief money. In short, the fear is that Trump wants some of the money to go to companies friendly to him – whether they are affected by COVID-19 or not.

Indeed, when the world is on the edge of chaos, fraudsters big and small have no scruples about taking advantage of people’s fears and vulnerabilities.

Bruce Livesey  –  I20 Research  –   bruce@i20research.com

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