Consumer Scams Abound: Preying on Fears Generated by the COVID-19 Pandemic

By Patricia Stamler, Shareholder

In the wake of the COVID-19 pandemic we have been inundated with a 24-hour daily news cycle informing us of the spread of the virus, the death toll and the growing number of hospitalizations. Those of us residing in the Metro-Detroit area are bracing ourselves for the surge of COVID-19 cases predicted to arrive soon. Sadly, in the middle of this health emergency, there are unscrupulous people seeking to exploit some of our greatest fears surrounding this illness.

As a lawyer who represents whistleblowers in federal and state False Claims Acts (“qui tam”) cases against people who engage in schemes to steal from the taxpayers by submitting false claims for payment, I am mindful of the opportunistic scam artists who take advantage of people in times of crisis.  If there’s money to be made, fraudsters will surface. The best protection against these scams is to be aware of the nefarious scams tied to the Coronavirus (COVID-19) outbreak.

Law enforcement agencies have identified numerous scams and include:

1. Requests for donations from bogus, non-existent charities.
2. Contact by phone or e-mail advising people that their stimulus checks are ready and then requesting bank account and Social Security numbers, leading to identity theft.
3. Selling to sell fake cures, vaccines, and advice on unproven treatments for COVID-19. In this regard, some of the scam artists are posing as being from governmental organizations, such as the Centers for Disease Control and Prevention (CDC) and urging people to reserve a vaccine for COVID-19 by supplying their credit card numbers and to provide personal information such as Social Security numbers.
4. Posing as a door-to-door representative of an organization like the Red Cross and offering home testing for COVID-19.
5. Creating fake entities online through websites and social media claiming they are selling medical supplies like surgical masks.
6. Offering bogus promotions on social media platforms, claiming that products or services of publicly traded companies can prevent, detect, or cure COVID-19, and falsely promising to consumers that the stock of these companies will dramatically increase in value. These promotions are often styled as “research reports,’ make predictions of specific “target price,” and relate to microcap stocks, or low-priced stocks issued by the smallest of companies with limited publicly available information.
7. Impersonating representatives of national and global health authorities, including the World Health Organization (WHO) and the CDC, by sending phishing emails designed to trick recipients into clicking on a link or opening an attachment that downloads malware and gains access to the recipient’s personal information, including usernames, credit card numbers and passwords.
8. Creating and manipulating mobile apps and websites purportedly designed to track the spread of COVID-19 but are actually used to insert malware that will compromise users’ devices and personal information, then seeking payment to reverse the damage.
9. Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.
10. Unscrupulous doctors writing prescriptions for medications that are said to cure COVID-19, for which there is currently no known cure or therapeutic treatment resulting in unwitting consumers taking unapproved medication that can be harmful.
11. Phone and email contacts who pretend to be doctors and hospitals who have treated a friend or relative for COVID-19, and demand payment for the alleged treatment.

Err on the side of extreme caution. Before you release any personal information (e.g. credit card information, banking information, medical record information, insurance information, social security information, etc.) to a caller, an emailer, etc. you must confirm that the request is from a legitimate source. Report all suspected scams to the Michigan Attorney General’s office. Information on how to file a consumer fraud complaint can be located at the following link Michigan Consumer Complaint Form. Updates on consumer scams tied to the COVID-19 outbreak can be found at COVID19 Consumer Scams.

Additional information about COVID-19 and the recently passed CARES Act can be found on our website here. 

If you feel you have a potential whistleblower False Claims Act claim, please contact me to discuss your claim. Additional information about COVID-19 and the recently passed CARE Act can be found on our website www.hertzschram.com. Although our office is physically closed, we are operating our business remotely. All our attorneys are available via phone by calling our office number at (248) 335-5000.