New Year, New Fraud Tactics

KPM Fraud Update link to blog.

04 Jan New Year, New Fraud Tactics

Whew, you made it through 2020! But do not rest easy yet. Unfortunately, fraud perpetrators enjoyed a profitable year, and there are signs they may continue to feed off Americans as long as the pandemic is active. Here are several scams to watch for in 2021.

PPP Fraud
Struggling small-business owners have welcomed last month’s 11th hour extension of the Paycheck Protection Program (PPP). They are not alone: Fraudsters skilled at falsifying loan applications also are eager with anticipation.

The Justice Department has brought charges against at least 80 individuals for stealing $127 million from the first PPP. Law enforcement expects to charge more (likely many more) con artists as evidence is uncovered. Indeed, the House Select Subcommittee on the Coronavirus Crisis claims that at least $14 billion in PPP loans were improper. Not all of these cases were outright fraud, but there is evidence that some business owners and lenders ignored PPP guidelines.

To help prevent further misuse of these loans, $50 million has been allocated to the Small Business Administration for PPP fraud prevention and audits. To avoid unnecessary scrutiny or legal trouble, business borrowers should make sure they understand all eligibility requirements for PPP loans and are qualified before applying.

Vaccine Cons
Consumer scams related to the pandemic also are still going strong. Even before COVID-19 vaccinations gained FDA approval, fraudsters conned many Americans (primarily via email and online ads) into paying for nonexistent cures and preventive treatments.

This past month, the FBI and several other federal agencies warned that perpetrators are now advertising COVID-19 vaccine ‘early access’ for those willing to pay a fee or submit medical and other personal information. Make no mistake: These are fraud schemes. To receive a vaccine, visit the Food and Drug Administration or Centers for Disease Control and Prevention websites or consult your physician to learn when you will be eligible.

Pet Scams
Fraudsters took note when many Americans adopted pets to provide companionship during the pandemic. The Federal Trade Commission is warning about fake ads picturing puppies, kittens, and other pets for sale or adoption. The fraudsters typically first request an amount that sounds reasonable up front. Once they receive that, they ask for more and more … for vet bills, health certificates, shipping, and anything else they can come up with. Needless to say, there are no actual pets.

You can avoid falling for such scams by performing extensive due diligence. For example, get the name and address of the seller (and verify them) and arrange for a videoconference to see the pet in the possession of the seller. Even better, adopt an animal from a shelter you can visit in person.

Staying Safe
There are a lot of fraud threats out there these days. For help combating consumer and business fraud, contact us.