Fraud Alert - COVID-19-related fraud schemes—and time-honoured tips to avoid becoming a victim during this global pandemic

March 19, 2020

While Canadians struggle to figure out acceptable social-distancing behavior during the COVID-19 pandemic, criminals measure opportunities to benefit from the uncertainty created by the global crisis.

Business as usual, the Canadian Anti-Fraud Centre (CAFC) provides ongoing information on the types of fraud scams prevalent in Canada.

According to the CAFC, approximately 20,000 Canadians report being victims of fraud in 2019, losing approximately $100 million.

By the end of February 2020, approximately 4,100 Canadians reported being victims of fraud—losing about $9 million in just two months.

As the coronovirus pandemic escalates, professional fraudsters and organized criminals have found yet another fear to exploit in order to defraud Canadians of their hard-earned money—the same fear that prompted some people to behave irrationally, profiting from hoarding supplies and reselling them at much higher prices.

Fraud schemes are taking advantage of COVID-19 fears

Pop-up websites and/or private companies are claiming to sell products and/or services to cure COVID-19, or to provide faster access to COVID-19 tests—in almost all cases, once the customer sends the money no product comes to the door.

Remember: Only hospitals can perform novel-coronovirus tests and there is no cure for COVID-19.

Phishing schemes to obtain sensitive personal information for identity theft are taking the form of emails or phone calls from imposters posing as workers with government and/or legitimate aid agencies providing support during the global crisis, such as the World Health Organization or Canadian Public Health.

Crowdfunding schemes are asking for donations to help families affected by COVID-19 with the unforeseen medical expenses, transportation costs to bring home family members stuck elsewhere, and/or living expenses and lost employment income.

Door-to-door fund-canvassing schemes are being undertaken by fraudsters posing to be from reputable charitable organizations.

Door-to-door sales schemes are offering fake decontamination services.

Targeting opportunists, fraudsters may also urge people to invest in hot stocks or startup companies focused on the disease or a vaccine—with promise of higher-than-traditional returns on investment.

Time-honoured tips to avoid fraud during this unprecedented global pandemic

Historically, fraudsters target the most vulnerable members of our society—the same populations most vulnerable to coronavirus. The elderly, for example.

Protect yourself from becoming a victim of fraud during an unprecedented global pandemic by following our tips:

  • Keep apprised of the types of scams active in the marketplace by checking the CAFC website.
  • Beware of unsolicited information—whether it be medical or investment advice.
  • Ask questions if something seems too good to be true—whether offered in person at your front door, or via a phone call or an email.
  • Don’t click on links in unsolicited emails.
  • Rely on trusted websites and/or healthcare professionals for medical information.
  • Verify charity registration and that any individual at your doorstep is an authorized representative before handing over your hard-earned money to help someone in need.
  • Stay calm, alert, and vigilant, during the coronavirus pandemic as well as during times less historic.

Contacts

Chetan Sehgal, CPA, CA∙IFA, CFF, CFI, CAMS, MAcc, Partner, Forensic Disputes & Investigations

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