Protect your finances from scams, part 3: COVID-19 Scams - what we learned

In this guide, we look at COVID-19-related scams and fraud. We offer tips to help you avoid similar types of scams. We also explain what you can do if you’re a victim of fraud.

But just how bad was it?

• Coronavirus scams - How bad was it?
  
• Coronavirus fraud scams
  
• Covid-19 scams - What have we learned?
• What if I have been scammed?

Coronavirus scams - How bad was it?

According to Action Fraud, the reporting centre for fraud and cybercrime in the UK, during the Covid-19 lockdown, 16,352 people were victims of online shopping and auction fraud, costing a total of £16.6 million. The scams included platforms like Facebook and eBay, where victims discovered that purchased items such as mobile phones and other electronic devices simply didn’t arrive.

TransUnion estimated that up to May 2020, one in ten adults in the UK had become victims of Covid-19 fraud. It further reported that online fraudsters had targeted nearly one in four adults. In April 2020, 18 million fake coronavirus scam emails were blocked by Google every day. Sadly, the sheer volume of attempted fraud and the high number of victims during the pandemic show fraudsters are always looking for opportunities, no matter the cost.

Fraudsters take advantage of panic and confusion to disguise their scams and rush people into making decisions they would not normally make. The 2020 pandemic played into their hands.

John Cannon, managing director of fraud and ID at TransUnion in the UK, said scammers "exploit our fears during times of turmoil, such as a global pandemic. People can find it particularly difficult to spot fraud in a changing environment where we're facing new and different situations." Additionally, many industries, such as travel and entertainment, were closed during the lockdown, removing methods fraudsters usually use to steal money, such as fake travel trips or phoney concert tickets.

The Covid-19 pandemic also meant many people had to do more things online than they had not done before, as well as spend more time online. This includes opening accounts on websites and entering card details to pay for everyday items online.

Never before had there been as much online activity. For example, during April 2020 adults spent approximately four hours a day online. The previous high was three-and-a-half hours in September 2019, according to a BBC report. Things had changed, and so did the scams.

Coronavirus fraud scams

Scams continually change, and criminals will use new methods to catch you off guard. For example, it did not take long before fraudsters took advantage of the Test and Trace system. The system was launched on 27th May 2020, and in less than one-week reports showed fraudsters were already exploiting the system to steal card or bank details. 

Here are examples of other coronavirus online fraud scams committed at the time: 

Fake products scams 

Fraudsters offered goods such as face masks, gel sanitiser, vaccines and other highly sought after products and equipment. Often these included a deal that is too good to be true. Or they pretended to be medical professionals offering testing kits for a fee. The goods were intentionally not delivered or turned out to be counterfeit, some were even harmful. Or the card details provided to make the purchase were used fraudulently. 

TIP: Avoid buying from unofficial sellers, unsecured websites or sites you do not recognise. For help on how to identify fake or cloned websites (also known as pharming), see our guide: ‘Common types of online scams to avoid’, section: "What is pharming?”.

HMRC scams

Criminals often pretended to be from HMRC, offering goodwill payments as part of government schemes designed to give financial relief to individuals, such as sole traders, businesses and owners hit by the lockdowns. Fraudsters also tricked many by offering tax refunds, interest-free loans and other benefits. Often, these scams would take victims to a fake version of the HMRC website, where details such as names, addresses, card and bank details are captured. 

TIP: HMRC will never ask for personal or financial information in a text message, do not open links in such messages. Additionally, HMRC will never send notifications by email or social media about tax rebates, refunds, or personal information. For more information, visit HMRC-related phishing emails, suspicious calls and texts.

Misinformation

According to an Ofcom study at the time, 46% of respondents had seen false or misleading coronavirus information since the lockdown. Misinformation was used by fraudsters, often pretending to be from a government institution or authority. For example, during the lockdown, some people received notifications to pay a £35 fine for breaking social distancing rules.

Much of this false information was placed on online social platforms. Mid-July 2020, influential Twitter accounts, now renamed as X, were hacked - including those of Elon Musk, Barack Obama, Kanye West and Bill Gates. Tweets from hacked accounts stated that they were giving back to the community due to Covid-19 and that you could double the Bitcoin sent to a fake address. Other scams included the sale of fraudulent goods.

Note: Be particularly careful of offers shown on social spaces, including paid for or sponsored adverts. Don't believe everything you read. And check information is accurate and up-to-date before taking any action. 

Financial services scams

Many scams were related to financial services. Common methods used included:

• Fake account and investment scams: Criminals offered the opportunity to move money to a "safe" account, by stating that your bank (or a financial institution you use) was in trouble due to the economic downturn. Also, uncertainty around stock-market shares was used by criminals to get you to invest or move money elsewhere.
• Refund scams: Usually, these types of scams involved fake holiday refunds (or other events such as a wedding). Scammers would contact you pretending to be from a Claims Management Company or even credit card providers.
• Loan fee fraud: Fraudsters would provide you with a loan or credit that you never received, for a fee. According to the FCA advance fee fraud payments are usually between £25 and £450.

Tip: Don't give your details unless you are sure who you are dealing with. Remember, a regulated, reputable financial provider will not randomly contact you or try to scare you into doing something. Instead, end the call or close the message and contact the relevant organisation directly.

Testing and tracing scams

Many fraudsters try to contact members of the public pretending to be part of the government's Test and Trace Service. They would often ask for bank details to cover the cost of testing kits. There were also fake Test and Trace messages, which are usually phishing attempts. You can find out more about phishing in our guide ‘Common types of online scams to avoid’, section: ‘What is phishing?’.

Scams targeting businesses

Businesses were also being targeted with scams to buy fake products for use in the workplace, tax refunds, business loans, and other benefits. Tactics used included computer viruses, scam emails and coronavirus-related ‘ransomware’.

Covid-19 scams - What have we learned?

While so much ground to a halt, especially during lockdown, scams did not, and never will. Criminals sold fake products, pretended to be government organisations, and even used testing and tracing schemes to perform fraud. They tried everything and anything.

Fraudsters are opportunists and will use events and panic to distract potential victims. Never give your details, bank, or card information, especially if you feel pressured or panicked. If you do give your details ensure:

1. You’re absolutely certain of who you are talking to
2. You were expecting to be contacted

Criminals may try using your details in several ways, including trying to take out credit in your name, including personal loans or short term loans. It’s good to check your credit report regularly and see if there have been any hard credit checks as a result of credit applications that you did not make.

Here are a few additional tips:

• Do not click links or open emails from senders you don't already know.
• When looking at a financial services provider in the UK, ensure they are regulated and on the Financial Services Register.
• Reject offers that come out of the blue.
• Do not give out personal details (bank details, address, existing insurance/pensions/investment details).
• If a firm calls you unexpectedly or you have doubts, end the call and contact them directly.

What if I have been scammed?

You should act right away, irrespective of whether you know or suspect you have been a victim of fraud or scammed. Here are five steps you can take:

1. First, contact your bank or card issuer and inform them of the situation to stop fraudulent access to your account.
2. If you have already responded to a scam, stop all communication going forward.
3. Report the matter to Action Fraud on 0300 123 2040. You can also contact the FCA Consumer Helpline on 0800 111 6768 for Financial Services-related scams.
4. Change all your passwords and update your anti-virus software.
5. Regularly monitor your account and credit report for any suspicious activity.

Remember, too, that if you lose your debit or credit card, or if it is stolen, you should report it and block it immediately. You can find most UK bank or card issuers' details by using the MustCompare Lost Card Contacts where you can find most UK banks.

In summary

There is a lot we can learn from scams in the past. Even during difficult times like COVID-19, scammers are opportunists and merciless. So, never be afraid to stop and challenge a communication or information you see or read. Even if it sounds important or urgent, it’s always better to act cautiously and not rush.

Ask yourself: Am I expecting this communication? Does it sound odd or too good to be true? Am I being pushed or rushed to do something? Many scams used the fear and panic caused by Covid-19 to trick victims. For more helpful tips on tell-tale signs of a scam, see How to identify an online scam.

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