How to Protect Financial Health in the Pandemic Era
With white-collar criminals and scammers capitalizing on the threat of COVID-19 during turbulent economic times, the Texas State Securities Board is warning the public on how to protect themselves and remain secure. Their general advice is to steer clear of anything that sounds too good to be true, it most likely is.
Here’s what you should look out for:
- COVID-19 Schemes: Be wary of investment schemes tied to the threat of COVID-19. Scammers may claim to raise capital for companies developing in-demand medical supplies and equipment. They may appear falsely legitimate by drawing upon news stories or medical reports, attempting to profit from widespread fear and confusion. The U.S. Department of Justice recently took its first enforcement action against COVID-19 fraud when a fraudulent website operator in Austin claimed to sell vaccine kits by the World Health Organization.
- Phishing Scams: Perpetuators may claim an association with the Centers for Disease Control and Prevention (CDC) or the World Health Organization (WHO), impersonate government personnel, or offer medical advice or services. If you receive emails such as these, be careful not to open links or attachments.
- Miracle Cures: Scammers may claim to have discovered a medical breakthrough or developed a means to cure COVID-19. A vaccine being sold by any online pharmacy isn’t real. You should not send money to anyone claiming they can prevent COVID-19.
- Fraudulent Charity Schemes: White-collar criminals may pose as charities raising money for those affected by COVID-19. Before donating, you should verify that the charity is authorized to raise money for the sick or secure donations to help uninsured persons pay for medical treatment. Avoid online solicitations for cash and gift cards, as these schemes have become a popular way for scammers to steal money. If you want to donate to a cause, you should work with a legitimate, established organization.
- Economic Relief Schemes: Though the federal government may send checks to the public to stimulate the economy, it will not require the prepayment of taxes or a processing fee. Anyone who demands prepayment will almost certainly steal your money.
- Off-market Private Deals: Scammers take advantage of off-market transactions, as they are not subject to review by federal or state regulators.
- Gold, Silver, and Other Commodities: Scammers may sell fraudulent investments in gold, silver and other commodities that are not tied to the stock market, often concealing hidden fees and mark-ups.
- Recovery Schemes: Be wary of buy-low sell-high recovery schemes, promising a value increase when the markets strengthen.
- Get-rich-quick Schemes: Scammers will capitalize on changes in the unemployment rate. Get-rich-quick schemes can falsely promise profit for rent, utilities or other expenses. They frequently target retirees and senior citizens.
- Replacement and Swap Schemes: Unlicensed persons may encourage you to liquidate your investments and use the proceeds to invest in more stable, more profitable products. But, investors may need to pay fees, while the new products fail to provide stability or profitability.
- Real Estate Schemes: Scammers often promote these schemes as safe and secure, claiming real estate can be sold and the proceeds can be used to cover any losses. Though it may seem appealing, significant risks come with real estate investments.
