COVID-19 Fraud Prevention

Index

Introduction

The COVID-19 crisis is resulting in new scams that target businesses including nonprofits as they adjust to changes in how they conduct business. Unfortunately, scammers are creating new ways to fraudulently take advantage of businesses during this vulnerable time. As grantees work diligently to meet the needs of their clients and employees, it is also important to be vigilant to indicators of scams aimed at defrauding businesses.

The Pandemic Response Accountability Committee (PRAC) is responsible for overseeing the integrity of pandemic relief spending. In conjunction with that responsibility, the PRAC has disseminated links to fraud alerts issued by various Inspectors General in an effort to prevent individuals from becoming victims of fraud. We include those below, as they will alert grantees about fraud schemes that could affect their clients and staff, as well as the operation of their programs.

The OIG has compiled a list of scams targeting businesses and their employees due to the vulnerabilities associated with adjusting how day to day affairs are conducted. We ask that you notify all staff but especially administrative staff of these risks. If your program becomes the target of a scam, please follow the instructions below for reporting the issue to the appropriate authorities.

In addition, during the COVID-19 crisis, grantee clients are at increased risk for scams. As grantees expand their case priorities and services to meet the growing legal needs of their communities, individuals with legal needs related to grantee case priorities are at an increased risk for scams due to the COVID-19 crisis.

The OIG has compiled a list of scams that target clients in areas associated with grantee case priorities. We ask that you notify grantee case handlers of these risks as they work to assist clients through the COVID-19 crisis. If case handlers become aware that a client may have been a target of a scam, please follow the instructions below for reporting the issue to the appropriate authorities.

We will update the lists as we become aware of new scams that clients and grantees may encounter.

Pandemic Response Accountability Committee: Fraud Alerts, Issued by OIGs, Help Protect Americans from Becoming Victims of Fraud

Fake Unemployment Benefits Websites Used to Capture Consumers' Personal Information

On March 4, 2021, the Department of Justice (DOJ) released a news alert warning of fraudsters creating websites mimicking unemployment benefit websites, including state workforce agency (SWA) websites. The fraudsters use text and email phishing schemes to embed links to the fake websites in order to capture consumers’ personally identifiable information. This alert provides resources for consumers to protect their information and encourages consumers to report fraudulent communications.
DOJ News Alert (March 4, 2021)

Fraudulent Claims for Unemployment Insurance Result in Tax Forms Issued Erroneously

On February 26, 2021, the DOJ issued an alert to warn of fraudsters using stolen identities to file fraudulent unemployment insurance claims in order to exploit benefits related to COVID-19. The DOJ warns that due to the widespread fraud, consumers may receive a Form 1099-G indicating that they have collected unemployment insurance benefits when they have not done so. The alert provides resources for potential victims.
DOJ-OIG Alert (February 26, 2021) (pdf)

Bad Actors Pretending to be Internal Revenue Service Employees Demanded Payments and Information

The Department of Treasury, OIG released a warning to taxpayers about fraudulent webpages, social media-based communications, and phishing communications claiming to be from the IRS. The fraudulent communications ask for sensitive personal information or payments from taxpayers. The alert provides tips for taxpayers to avoid these scams.
Treasury-OIG Alert

New Text Message Scheme Attempts to Steal Personal Information and Money

On January 29, 2021, the DOJ issued an alert to warn consumers of a new text message phishing scheme where fraudsters claim to be a state workforce agency (SWA). Fraudsters aim to have consumers click the link and provide personal information.
DOJ-OIG Alert (January 29, 2021) (pdf)

The PRAC Highlights a New Challenge: Informing and Protecting the Public Against Pandemic-Related Fraud

On February 3, 2021, the Pandemic Response Accountability Committee (PRAC) released an update to Top Challenges in Pandemic Relief Response (pdf).

Scams that Pose a Risk to Grantees and their Employees

Cyber Attacks and Telework Vulnerabilities

On April 1, 2020, the FBI made a Public Service Announcement (PSA) about an increase in cyber-attacks related to virtual environments including telework software vulnerabilities and Business Email Compromise schemes where scammers impersonate legitimate vendors. The PSA provides best practices for how you can protect your organization.
FBI-PSA Alert Number I-040120-PSA

On April 8, 2020, the US Department of Homeland Security (DHS) and the Cybersecurity and Infrastructure Security Agency (CISA) issued an alert with a list of cyber-attacks occurring through the exploitation of COVID-19. The cyber-attacks include phishing and malware distribution using COVID-19 as a lure, registration of new domain names related to COVID-19, and attacks against teleworking infrastructure.
DHS and CISA Alert

Small Business Administration (SBA) Loan Scams

On August 12, 2020, the Cybersecurity and Infrastructure Security Agency (CISA) released an alert related the current Spoofing of the SBA’s COVID-19 loan relief webpage via phishing emails. The alert provides technical details, mitigation options including a link to CISA’s free vulnerability scanning and testing services, and links to additional resources.
Alert (AA20-225A)

On March 31, 2020, the SBA-OIG released a Fraud Alert about potential fraud schemes related to economic stimulus programs offered by the SBA in response to COVID-19. SBA related scams include grant fraud, loan fraud, and phishing. See the SBA-OIG Hotline information listed in article for reporting scams related to the SBA.
SBA-Programs – Scams and Fraud Alerts

On April 2, 2020, the Federal Trade Commission (FTC) issued a blog about scams targeting businesses and individuals seeking advice for financial relief. The blog highlights scams that include phone calls and emails from someone impersonating a representative of your financial institution or a government agency, and emails and phone calls soliciting your organization to apply for financial relief.
FTC Blog (April 2, 2020)

On April 28, 2020, the FTC released a blog warning of scams linked to the SBA’s Paycheck Protection Program (PPP) or Economic Injury Disaster Loans (EIDL) programs. The scams target business owners in order to trick them into giving sensitive business information, like bank account numbers, employees’ Social Security numbers, and money.
FTC Blog (April 28, 2020)

Price Gouging Scams

On April 9, 2020, the LSC-OIG released a Fraud Corner article about risks associated with potential price gouging, price-fixing, and bid-rigging scams that could adversely affect LSC grantees as they make critical purchases during the COVID-19 crisis.
LSC-OIG Fraud Alert COVID-19 Purchasing Schemes

Fake Charities/Nonprofits

On March 26, 2020, the California Attorney General issued a press release related to fraudulent charities. Risks include “look-alike” websites and nonprofit organizations that have familiar sounding names. LSC grantees should report any business trying to impersonate your nonprofit to receive fraudulent donations or defraud clients seeking legal aid.
CA Attorney General Press Release

On May 5, 2020, the FTC released a blog providing guidance on how to avoid fake or sham charities.
FTC Blog (May 5, 2020)

Information Technology Scams

On March 25, 2020, the FTC released a blog about COVID-19 scams targeting businesses. The blog describes seven COVID-19 scams involving businesses and includes scams involving calls or messages claiming to come from a technology staff member asking for a password or directing the recipient to download software.
FTC Blog (March 25, 2020)

Scams that Pose a Risk to LSC Grantee Clients

Public Benefits

Relief Check Scams

On April 1, 2020, the FTC released a blog about scams related to relief checks. The scams include phishing, asking individuals to sign up to receive a relief check in order to steal personal information, and promising early access to relief checks.
FTC Blog (April 1, 2020)

On May 4, 2020, the FTC released a blog encouraging the reporting of a suspected identity thief stealing stimulus checks simultaneously to the FTC and IRS through https://identitytheft.gov/. The website is a one-stop resource for to report identity theft and get a personal recovery plan.
FTC Blog (May 4, 2020)

Social Security Administration (SSA) Scams

On April 7, 2020, the FTC released a blog about scams related to SSA during COVID-19. The scams include a call with an SSA caller ID trying to get your Social Security number or a payment and scams threatening to cancel social security numbers.
FTC Blog (April 7, 2020)

On March 27, 2020, the SSA Inspector General warned of a new scam using fraudulent letters sent through US Mail that threaten to suspend social security benefits. SSA-OIG provides an online form for reporting suspected scams.
SSA-OIG Blog

Medicare Scams

The US. Department of Health and Human Services (HHS) OIG issued a fraud alert warning Medicare beneficiaries of schemes targeting them through telemarketing calls, social media platforms, and door-to-door visits in an effort to steal their personal information.
HHS-OIG Fraud Alert

Unemployment Scams

The OIG for the US Department of Labor (DOL) issued a fraud alert warning of scammers offering to file unemployment benefits claims for individuals in an effort to steal personal information. See the DOL-OIG Hotline information listed in the article for reporting information regarding this scam.
DOL-OIG Fraud Alert

Supplemental Nutrition Assistance Program (SNAP) Scams

On March 24, 2020, the US Department of Agriculture (USDA) issued a fraud alert detailing scams that target SNAP recipients in an effort to steal personal information.
USDA Fraud Alert

Housing

Mortgage and Rental Scams

On April 8, 2020, the Federal Housing Finance Agency (FHFA) released a Fraud Flyer on fraud prevention tips for borrowers, renters, and the mortgage industry. The flyer identifies risks through fraudulent calls, emails, and text messages from scammers posing as banks or mortgage companies. The flyer also discusses fraudulent offers for mortgage or rental assistance that require up-front payments such as cash, check, or wire transfer payments. See the FHFA-OIG Hotline information listed in article for reporting information regarding mortgage and rental scam.
FHFA Fraud Flyer

The U.S. Department of Housing and Urban Development (HUD) OIG issued a Fraud Bulletin warning of fraud scams targeting homeowners during the COVID-19 pandemic. The scams include unsolicited contact from individuals impersonating representatives of government agencies, banks, mortgage companies, or nonprofits; offers of mortgage assistance that require upfront payments, spoofed phone numbers and emails; and additional unsolicited contacts or offers of assistance.
HUD-OIG Fraud Bulletin (For Borrowers)

HUD-OIG issued a Fraud Bulletin warning of fraud scams targeting renters during the COVID-19 pandemic. The scams include upfront payment, spoofing, unsolicited contact, and harassment.
HUD-OIG Fraud Bulletin (For Renters)

HUD-OIG released a Fraud Bulletin warning of common schemes to defraud using phone, mail, text, email, social media, or in person. The schemes include unsolicited contact from HUD, unsolicited eviction help, and phishing attempts.
HUD-OIG Fraud Bulletin (Protect Yourself from Fraud)

Consumer Law

On November 24, 2020, the US Department of Health and Human Services OIG, warned consumers of scammers using social media to perpetrate COVID-19-related scams. HHS-OIG provided measures consumers can take to protect themselves from the social media scams.
HHS-OIG Fraud Alert

On June 25, 2020, the FTC released a blog informing consumers how to assist contact tracers and avoid scammers pretending to be contact tracers.
FTC Blog (June 25, 2020)

Webpage with links to all State Departments of Health to assist consumers in verifying the legitimacy of contact tracers:
https://www.cdc.gov/publichealthgateway/healthdirectories/healthdepartments.html

The Federal Communications Commission (FCC) posted a series of safety tips for consumers related to COVID-19. The scams include hoax text message campaigns and scam robocalls offering free home testing kits, promoting bogus cures, selling health insurance, and preying on virus-related fears.
FCC Tips

See also LSC-OIG Fraud Corner COVID-19 Fraud Schemes

The Food and Drug Administration (FDA) issued a warning to consumers on fraudulent COVID-19 tests, vaccines and treatments. The warning also provides advice for how to protect yourself and your family from COVID-19 fraud.
FDA Warning

Many states are posting warnings regarding COVID-19 utility scams affecting consumers. The scams include residents receiving calls and texts on behalf of the utility company offering a reduced service fee. Below is a link to the warning posted by the Office of the Attorney General for the District of Columbia.
Warning from DC Attorney General

Tax and Identity Theft

On November 4, 2020, the IRS, state tax agencies, and the tax industry warned of a new text scam that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.
IRS News Release (November 4, 2020)

On May 14, 2020, the IRS released a video to warn taxpayers of COVID-19 scams related to IRS services.
IRS YouTube Video (May 14, 2020)

On April 2, 2020, the Internal Revenue Service (IRS) issued a report warning of calls and emails impersonating the IRS in an effort to perpetrate tax related schemes and identity theft. The report also warns that some schemes are targeting retirees.
IRS Report (April 2, 2020)

Senior Citizens/Elder Law

On March 30, 2020, the FTC released a blog post warning of scams specifically targeting individuals 60 and over. The scams use phone calls, texts, emails, social media, and door-to-door visits in an effort to steal personal information and money.
FTC Blog (March 30, 2020)

Where to Report Scams

Note: We encourage individuals and grantees to report scams to each of the entities listed.

Report all scams, frauds, and bad business practices to the Federal Trade Commission.

Legal Services Corporation – Office of Inspector General Hotline

For additional support, please report all scams against LSC grantees to the LSC-OIG Hotline.

National Center for Disaster Fraud Hotline

State Attorneys General

Link provides resources to all state and territory attorneys general.

LSC-OIG Hotline

For any loss of $200 or more and for any additional assistance reporting scams.

Local Law Enforcement

For internet related COVID-19 scams please also report to:
FBI’s Internet Crime Complaint Center

For identity theft related COVID-19 scams, please also report to:
Report Identity Theft to the FTC

What to Report When Reporting a Scam

Information that you should report if you become aware of a scam that has been committed or attempted against a client or the grantee and/or its employees include:

  • Victim’s Name (including any individual or business name), address, email, and telephone number;
  • Subject or Perpetrator’s Name (including any individual or business name), address, email, telephone number, website social media name or link, and IP address;
  • Explanation of what type of assistance or product was offered; and
  • Explanation of any financial transaction that took place or any sharing of personal information.