FTC leads crackdown on income scams amid spike in fraud during coronavirus pandemic

Scams targeted in the FTC effort were responsible for the loss of more than $1 billion.

The Federal Trade Commission is partnering with officials at the federal, state and local level to crack down on scams promising fraudulent sources of income to the public during the coronavirus pandemic, the agency announced on Monday.

Dubbed “Operation Income Illusion,” the enforcement effort will target “the operators of work-from-home and employment scams, pyramid schemes, investment scams, bogus coaching courses and other schemes that can end up costing consumers thousands of dollars,” the FTC said in a press release.

FDA AUTHORIZES PFIZER CORONAVIRUS VACCINE FOR EMERGENCY USE

“Scammers are preying on the unemployment and anxiety arising from the pandemic by making false promises of big income working from home,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “If someone promises you guaranteed income, but then tells you to pay them, tell the FTC right away so we can work to shut them down.”

The scams have ranged from the work-from-home reselling of luxury products, to pyramid schemes soliciting cash and that play on cultural norms in immigrant communities, to fraudulent investment rackets promising quick profits.

Especially vulnerable targets are seniors and retirees, immigrants, Black and Latino people, students and military families.

Scams targeted in the FTC effort were responsible for the loss of more than $1 billion.

Losses reported by consumers from the schemes rose to the highest level on record in the first nine months of the year at more than $150 million, Smith told reporters in a conference call. Officials estimate only a small fraction of the burned consumers report their losses to authorities.

CLICK HERE TO READ MORE ON FOX BUSINESS

“These scammers are taking advantage of a desperate situation to rip money from the hands of those who most need it,” Smith said.

The FTC conducted the sweep along with nine states, federal prosecutors in Arkansas, Arizona and California, several local law enforcement agencies, and the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission.

“There are people out there whose job it is to steal your money,” Maryland Attorney General Brian Frosh said on the conference call.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

He said his office is handling increasing numbers of cases involving affinity fraud, a form of pyramid scheme in which consumers are urged to tap friends, family, and church or ethnic-community members for money in addition to their own payment. A scam promoting investments in bitcoin was among them, Frosh said. His office also has brought several cases against sellers of phony franchises.

The FTC-led crackdown is part of a broader effort by authorities to educate the public about pandemic-related scams. The FBI publishes a resource page with updated information about the latest scams and how the public can avoid being victimized.

The Associated Press contributed to this report.

Load more..