COVID-19 Fraud: $586 Million Lost by Americans - Expert Analysis

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It's a problem that's truly gotten out of hand.

Financial fraud hasn't waned during the COVID-19 pandemic. If anything, it's increased.

U.S. consumers have now lost $586 million to fraud related to the pandemic, according to data from the Federal Trade Commission. All told, Americans filed over 269,000 fraud claims between the beginning of 2020 and mid-October of 2021. The typical fraud victim lost $392, but unfortunately, that number skews higher for older consumers. The median loss for those over 80 was $1,000. Talk about devastating.

If you're worried about falling victim to financial fraud, here are a few important steps to take to protect yourself.

1. Know the makings of a scam

Financial scams usually take a certain form. They start with an email, phone call, or text message informing you that you've either won money or are being penalized for something and need to pay to avoid consequences.

Sometimes, when those scams come via email, criminals use addresses that are made to look like they belong to official government organizations. For example, you might get an email from "taxinfo@irs.com" stating that you need to pay a tax penalty or risk jail time. But the IRS will never email you something like that. And also, official government organizations have a ".gov" in their email addresses.

As a general rule, you should make a point to never give out your bank account information in response to an unsolicited request. Similarly, don't follow a link and enter your credit card details because that's a good way for a criminal to charge up a storm on your account.

2. Check your credit report regularly

It's possible for a criminal to open a bank account or credit card in your name without you knowing. That's why it's important to check your credit report every few months. If you see open accounts listed in your name that you don't recognize, it's a red flag that a criminal may have stolen your identity.

Because consumer fraud has been rampant during the pandemic, credit reports are available for free on a weekly basis through April of 2022. Normally, you can only access one free copy a year from each reporting bureau. If you're worried about near-term fraud, you may want to check your credit report more regularly.

3. Only shop online using sites you know

Since the start of the pandemic, there have been roughly 57,600 fraud complaints related to online shopping. If you're buying things online, you may want to stick to well-known retailers like Amazon, Target, and Walmart. It's easy to be tempted by an unknown retailer that advertises a great sale. But if you fall victim to fraud -- say, you pay for a product that doesn't exist -- you won't be better off financially.

Now to be clear, this isn't to say that all smaller retailers are scammers. There are plenty of perfectly legitimate small businesses that operate online. But if you're given a choice between a company you've never heard of and an established brand like Amazon, you may want to go for the latter if prices are comparable.

Unfortunately, financial fraud has been rampant at a time when the country is dealing with a major health crisis. Take these steps to protect yourself so you don't wind up a victim.

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