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Statement: Consumer complaints about COVID-19 fraud near 50,000

For Immediate Release

U.S. PIRG Education Fund recaps actions taken by 15 federal agencies

WASHINGTON -- Consumer complaints to the U.S. Federal Trade Commission (FTC) related to the coronavirus approached 50,000 on Tuesday, and will undoubtedly pass that dubious milestone on Wednesday. Since the novel coronavirus (COVID-19) outbreak began, the top complaint categories have been related to travel, online shopping, text messages, health care and internet information services. 

U.S. PIRG Education Fund has documented the actions taken by the FTC and 14 other federal agencies in response to coronavirus scams. Those actions include sending more than 150 warning letters, suspending stock trading for 30 companies, and shutting down thousands of malicious web domains and email addresses. 

Mike Litt, U.S. PIRG Education Fund’s Consumer Campaign director, issued the following statement in response:

“While people are scared about their health and finances, con artists are having a field day. Consumers have reported more than $36 million in losses to the FTC, as the number of COVID-19 scams soars. 

The government should wield every tool at its disposal, including enforcement action, against scammers. Recent Department of Justice (DOJ) press releases have touted both criminal and civil legal actions brought against parties accused of fraud related to COVID-19 products and services. That includes health care benefits fraud, fake disease treatments and the sale of nonexistent medical supplies. 

“We all need to be on our guard. Before you click, pause first. Do your research and ask yourself if that website, email, text, direct message or call is legit. Do your homework before handing over your money or personal information.”

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Addendum:

How to report coronavirus-related scams

  • The DOJ’s National Center for Disaster Fraud (NCDF) Hotline can be reached at 1-866-720-5721 and through an online complaint form, which also includes a list of other agencies where complaints can be filed.

  • The FTC’s complaint form is available here.

How you can protect yourself from scams

  • U.S. PIRG Education Fund has developed a series of tips to help consumers facing these and other problems during COVID-19. 

Actions taken by federal agencies against coronavirus scams 

First published May 20, 2020

Actions taken by federal agencies against coronavirus scams include:

Bogus or non-existent products and opportunities

  • The Food & Drug Administration (FDA) has sent 56 warning letters to companies for marketing products with fraudulent COVID-19 prevention and treatment claims, including for colloidal silver, cannabidiol (CBD) and other products making vague immune boosting and antiviral claims. 44 of those letters were joint letters with the Federal Trade Commission (FTC).

  • The Federal Trade Commission (FTC) has sent 86 warning letters for deceptive or unfounded health claims and, in some cases, claims about earning potential from multilevel marketing companies

  • The Federal Communications Commission (FCC) and FTC have sent seven joint warning letters to companies about illegal coronavirus-related telemarketing calls. The FTC sent an additional nine letters on its own. 

  • The Securities and Exchange Commission (SEC) has temporarily suspended the trading of stock for 30 companies in connection with questionable COVID-19 claims, including some about tests and disinfectants.

  • The Department of Homeland Security's Homeland Security Investigations (HSI) has opened at least 315 investigations, seized more than $3.2 million in illicit proceeds, made 11 arrests, analyzed more than 19,000 COVID-19 domain names, and worked with Customs and Border Protection (CBP) to seize 494 shipments of illegal COVID-19 test kits, purported treatments and personal protective equipment (PPE).

  • Customs and Border Protection (CBP) has seized more than 177,000 prohibited medical supplies.

  • Actions taken by the Department of Justice (DOJ) include:

    • Creating the COVID-19 Hoarding and Price Gouging Task Force

    • Distributing, with Health and Human Services (HHS), more than half a million medical supplies confiscated from price gougers.

    • Coordinating partnerships, task forces or other cooperative efforts with federal, state and local agencies to tackle COVID-19-related fraud. A review of DOJ press releases indicates such efforts of varying arrangements in at least 17 states.

    • Bringing criminal charges against fraud. Our review of DOJ press releases found at least 11 charges against fraud related to COVID-19 products and services, including health care benefits fraud, fake treatments and the sale of nonexistent medical supplies. DOJ has coordinated with different agencies on these cases, including the Department of Defense (DOD), FDA, Federal Bureau of Investigation (FBI), HHS, HSI, Secret Service, U.S. Postal Inspection Service (USPIS) and Veterans Affairs (VA).

    • Taking civil actions. Our review of DOJ press releases found at least seven civil actions to stop fraudulent websites and halt the unlawful sales of sham treatments. On these cases, DOJ has coordinated with one or more of the following: the FBI, FDA, HHS, HSI, and Secret Service.

Impersonation/phishing scams

  • The Secret Service is investigating an unemployment benefits fraud ring.

  • The Secret Service is alerting health care facilities about vulnerabilities in their network that make them susceptible to ransomware. Seventeen hospitals and health care facilities have been identified as potential targets.

  • The Small Business Administration (SBA) and FTC issued two warning letters to companies whose marketing may mislead small businesses into thinking they can apply for official COVID-19 relief programs.

  • The FTC filed a civil action against a company posing as an approved lender for a federal coronavirus relief lending program.

  • The DOJ disrupted hundreds of online COVID-19 scams, including a site pretending to collect donations for the American Red Cross and sites spoofing government programs such as the IRS stimulus checks initiative. 

  • The Cybersecurity and Infrastructure Security Agency (CISA) identified and blocked more than 3,500 coronavirus-related malicious web domains and email addresses.

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