Since January 2020, scams relating to COVID-19 have targeted consumers across the nation.
The Federal Trade Commission (FTC) recently testified before a Senate subcommittee about the steps the agency is taking to police pandemic scammers who are capitalizing on the COVID-19 crisis to defraud American consumers.
Testifying on behalf of the FTC, Bureau of Consumer Protection Director Samuel Levine said the FTC has noted a surge in consumer complaints stemming from a broad range of deceptive COVID-19-related schemes. Since January 2020 and as of January 28, 2022, the FTC has received more than 292,000 reports associated with COVID-19 frauds, reflecting $674 million in fraud losses.
The agency is deploying new security and fraud prevention tools thanks to the agency’s expanded authority under the COVID-19 Consumer Protection Act of 2020. These tools include:
- Pursuing cases against more than a dozen COVID-19 scammers, with more investigations planned
- Issuing cease-and-desist demands to more than 425 companies making false or unsubstantiated COVID-19 claims, giving them 48 hours to stop their scheme or face federal charges
- Notifying state and local authorities of scammers’ possible criminal misconduct and alerted online companies about the fraudulent actors using their platforms to break the law
The FTC is seeing a significant spike in digital scams and abuse. The pandemic has required the day-to-day activities of Americans to transition online, and the testimony notes that scammers have been quick to take advantage of these changes, resulting in record reports of financial losses. The testimony notes a spike in reports about business imposters, undelivered merchandise and substantial losses stemming from e-commerce. Cryptocurrency and other investment and income scam reports have also risen sharply during the pandemic, as well as reports of fraud related to medical treatments.
In December, the agency launched an advanced notice of proposed rulemaking to combat government and business impersonation fraud. The FTC is also targeting its limited enforcement resources towards investigating intermediaries involved in spreading fraudulent schemes.