COVID-19 and utility bill scams

Robert Smith was worried about his health. He was exhibiting COVID-19 symptoms, such as a fever and cough. He saw an ad for a company that claimed he could come in for a free test. However, when he arrived, the company ran a battery of tests he didn’t need, including an MRI and complete blood count test. It turns out that the company then billed Medicaid for all the tests and pocketed the extra cash.

This fictional case is just like ones that reporters Monica Williams and Joe Duce of an ABC affiliate in Phoenix, Arizona, reported on its website (Charges announced in 3 COVID-19 related fraud cases in Arizona) on May 27, 2020.

Clinical trial COVID-19 scam

The U.S. federal government has invested billions of dollars in companies to produce a vaccine to prevent individuals from contracting COVID-19. As their research studies move forward, the companies have enlisted individuals to take part in trials to determine the effectiveness of their products. According to an Oct. 23, 2020, article (COVID-19 clinical trial: real or fake? Learn how to tell the difference, by Jim Kreidler) on the Federal Trade Commission’s (FTC) website, the problem is that fraudsters have taken advantage of the situation and have produced fake websites and promotional materials to lure volunteers into what appears to be valid COVID-19 vaccine trials.

Some individuals have a natural inclination to help others in situations like this, not knowing that they might end up being conned out of their money and/or personal identifiable information (PII). According to Kreidler, “They might promise you a doctor’s care and more than $1,000 in payment ... but as soon as they try to charge you for access, or ask for your Social Security, bank account or credit card number, your Spidey sense should start tingling, because, unfortunately, some of these so-called ‘research studies’ are fake."

Fraudsters commonly take advantage of a national and international crisis and develop related scams accordingly to rob individuals. This clinical trial scam is just another prime example.

The FTC offers this advice if you’re considering to be a volunteer in a clinical COVID-19 trial or some other research study:

• Don’t pay to participate. Real clinical trials will never ask you to pay them.
• Search the name of the clinical trial and the words “scam,” “review,” or “complaint” online to make sure the trial is real.
• Legitimate clinical trials must screen participants for COVID-19 trials, so they might ask for your name, contact information, age, gender, race, ethnicity or various pre-existing conditions (associated with higher risk of a COVID-19-related mortality). But they never ask you to give your Social Security number (SSN).
• Never share financial information (like your bank account or routing number). Most trials will offer to pay people to participate in the trial, but you can ask to be paid by check rather than direct deposit. Beware if they offer more than $2,500, about the maximum trials pay for Phase III.
• The National Institutes of Health (NIH) and the National Library of Medicine (NLM) maintain ClinicalTrials.Gov, a free searchable database of clinical studies on a wide range of diseases. You can also use the database to get more information about studies, including whether they are recruiting participants, and their contact information.
• If you’re interested in volunteering for a COVID-19 trial, you can sign up at the COVID-19 Prevention Network (coronaviruspreventionnetwork.org), a site run by the NIH’s National Institute of Allergy and Infectious Diseases.

If you encounter a trial that asks for money to participate or requests your PII such as your SSN or bank account number, inform the FTC immediately. You should also share your experience with your local media outlets and file a complaint with your attorney general regarding consumer issues, frauds and scams. You can find your state attorney general’s office at consumerresources.org.

Utility bill refund scam

Have you ever received a telephone call that mentioned that you overpaid your utility bill and that you qualify for a refund and discount? A lot of individuals are receiving them in this new scam that’s robbing them of their money and PII. Lisa Lake, a consumer education specialist at the FTC, reported on this scam on Oct. 23, 2020 (Overpaid your utility bill? That’s probably a scam). The call says all you need to do is press a number on your phone to get the refund and discount. But you need to stop and think: Do utility companies normally do this? No, they don’t! If you overpay a utility bill, they’ll normally credit your account. Also, utility companies usually don’t give discounts when you overpay a bill.

The FTC offers the following advice if you receive one of these phone calls:

• Hang up immediately. Don’t press any numbers or respond to any instructions.
• Never give the caller your SSN, account details or anything else. It takes very little information for scammers to rob you.
• Call your utility company, using the number on your bill, and tell them about the call.
• If you want to consider using a third-party utility company, check with the utility regulatory agency in your state to understand your rights and how these companies are supposed to work.
• Tell the FTC at ftc.gov/complaint.

COVID-19 government imposter scams

Since the advent of COVID-19 in early 2020, fraudsters have been actively developing numerous scams to steal money and PII from individuals and businesses. Their scams have addressed such issues as stimulus payments and “cures” and “treatments” for COVID-19. Of course, they have an active audience because everyone is looking for a magic bullet from a government agency to address the problem.

Businesses have been promoting the government stimulus checks to put more money in the pockets of individuals to help the economy and keep people working. But individuals and businesses need to be vigilant to avoid being scammed because there are a lot of imposters in the shadows waiting to pounce on uninformed and impulsive victims. They might get in touch by phone, email, postal mail, text or social media. So, beware!

The Consumer Financial Protection Bureau provides this advice to avoid being scammed out of your money and PII from government imposter scams:

• Know that the government will never call, text or contact you on social media saying you owe money or offer help getting your Economic Impact Payment (EIP) faster. If you receive a message from someone claiming to be from a government agency through social media, it’s a scam. Report it to the FTC at ftc.gov/complaint. If you’re eligible and haven’t yet gotten your EIP, visit IRS.gov for information.
• Visit government websites directly for trustworthy information. Don’t click on links in an email or text message. (You never should anyway!) Instead, open a new window and search for the name of the government agency. Visit coronavirus.gov for continually updated pandemic information.
• Say “no” to anyone claiming to be from a government agency asking for cash, gift cards, wire transfer, cryptocurrency or PII, whether they contact you by phone, text, email or even showing up at your door. Don’t share any of your PII with them.

On the same website, the Consumer Financial Protection Bureau also warns individuals of the following more common COVID-19 scams:

• Vaccine, cure, air filter systems and testing scams. Of course, a cure or vaccine doesn’t exist for this virus yet. If you receive any type of communication via phone call, email, text message or letter with claims to sell you any of these products, it’s a scam. (As of original publication of this column in the print version of Fraud Magazine, no drug companies had produced a COVID-19 vaccine. – ed.)  
• Fake coronavirus-related charity scams. Beware of any telephone call where the caller asks you to make a donation to a COVID-19 charity or if you’re contacted with a “follow-up” call regarding a donation pledge that you don’t remember. If you feel that you’re financially capable of contributing to a charity, then you make the call to them.
• “Person in need” scams. This is a coronavirus version of the famous grandparents scam. You get a phone call supposedly from a relative or friend who claims to be sick, stranded in another state or foreign country or otherwise in some sort of trouble, and they ask you to send cash or gift cards ASAP without telling anyone. You should hang up, collect your thoughts and then call the parents of the relative or friend “in trouble.”
• Scams targeting Social Security benefits. A caller tells you that your Social Security benefits have been suspended or decreased due to COVID-19, and you need to provide PII or pay by gift card, wire transfer, internet currency or mail cash to maintain benefit payments. However, the Social Security Administration (SSA) won’t suspend or decrease your payments. Report the scam immediately to the SSA inspector general at oig.ssa.gov.

The newest scams and how to stay safe: A recap

Clinical trial scam

• Don’t pay to participate.
• Do search the name of the clinical trial and the words “scam,” “review,” or “complaint” online.
• Don’t give your Social Security number.
• Don’t share financial information  and beware if they offer more than $2,500.
• Do check the National Institutes of Health and the National Library of Medicine. They maintain ClinicalTrials.Gov databases.
• Do sign up at the COVID-19 Prevention Network, if participating in a trial.

Utility Bill Refund Scam

• Do hang up immediately.
• Don’t give the caller your SSN, account details or anything else.
• Do call your utility company, using the number on your bill, and tell them about the call.
• Do consider using a third-party utility company.
• Do tell the FTC at ftc.gov/complaint.

COVID-19 Government Imposters Scam

• Do be aware that the government will never call, text or contact you on social media saying you owe money.
• Do visit government websites directly for trustworthy information.
• Don’t click on links in an email or text message.
• Do say “no” to anyone claiming to be from a government agency asking for cash, gift cards, wire transfer, cryptocurrency or PII.

Spread the word to help others

Include these important scams and important information to protect your online identity in your outreach programs and with your family, friends, and business associates. As part of my outreach program, please contact me if you have any questions or identity theft or cyber-related issues that you would like me to research and possibly include in future columns or as feature articles. I don’t have all the answers, but I’ll do my best to help. I might not get back to you immediately, but I will reply. Stay tuned!

Robert E. Holtfreter, Ph.D., CFE, is a distinguished professor of accounting and research at a university in the Pacific Northwest. He’s a member of the Accounting Council for the Gerson Lehrman Group, a research consulting organization, and is a member of the White-Collar Crime Research Consortium Advisory Council. He’s also on the ACFE’s Advisory Council and the Editorial Advisory Committee. Holtfreter was the recipient of the Hubbard Award for the best Fraud Magazine feature article in 2016. Contact him at doctorh007@gmail.com.