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How to Identify the Latest Fraud Trends

April 10, 2020

As the effects of COVID-19 continue to impact our daily lives, we know many of you are taking extra precautions to stay safe during this time. This not only includes maintaining health and safety, but also ensuring that you’re making safe and smart financial decisions, whether you’re purchasing groceries or medical supplies online, sending money to family or friends in need, donating money to charity, or looking for new employment.

Since fraudsters often use times of uncertainty to take advantage of consumers, we want to make sure that our customers have the resources and tools to learn how to identify potential fraud schemes and avoid falling victim to them. We’ve created a list of the common fraud trends to be aware of as you navigate through these uncertain times, and the ways that PayPal and other resources can help if you become a victim of fraud.

Common Fraud Themes

If you find yourself in a situation that you think could potentially be a scam, there are two important themes to keep in mind to help you decipher if you’re dealing with fraud:

  1. A fraudster will offer something, usually something that is too good to be true; or
  2. A fraudster will request something and wrap it in a fake urgent scenario that encourages you to act quickly.

Here are some of the common consumer fraud trends to be aware of as you transact online:

  • Online Merchant Fraud: As we continue to see shortages of hand sanitizer, face masks, and other items that help to protect against COVID-19, a fraudster may claim to have these types of in-demand products and charge customers, even though they don’t actually have the items. Before making purchases from any online merchant, be sure to do research into the merchant by looking for reviews and checking to make sure you’re shopping with a reputable seller.
  • Medical Treatment Scam: As there is currently no official cure for COVID-19, fraudsters may take advantage of the situation by selling fake medical treatments or cures that they claim they can be used to prevent or treat the virus. Before purchasing any of these items, do your research to verify the legitimacy of medications using resources from the Food and Drug Association (FDA), and be aware that there are not yet any FDA-approved products on the market to prevent or cure COVID-19. You can search through FDA-approved drugs and new drug applications through the FDA’s website.
  • Charity Scam: A fraudster may contact you asking for a donation to charity, often following an emergency or disaster situation, such as the one we’re currently experiencing with COVID-19. Before making a donation, make sure you do some research into the charity, checking ratings and understanding how much of your donation will go to the cause you want to support.
  • Family Emergency Scam: A fraudster may pose as a relative or a friend and ask you to send money immediately to help with an emergency, sometimes insisting that the request remain secret. In these situations, the fraudster often tries to trick their victim into sending money before the victim realizes the emergency is false. Before responding to these types of messages, make sure to take steps to verify the identity of the person asking for money. You can do this in a number of ways, including asking them questions that a stranger would not be able to answer, or reaching out to another family member or friend who may be able to verify the emergency.
  • Employment Scam: As more and more consumer jobs become affected by COVID-19, fraudsters might try to trick victims into paying the fraudster for an employment opportunity that “guarantees” to make the victim money.  Be aware that in most cases, opportunities that make these types of guarantees are often not legitimate.
  • Social Security Imposter Scam: A fraudster may contact a victim posing as a Social Security Investigator, claiming that there is a problem with the victim’s Social Security account and request that the victim resolve the problem by calling another number, when the fraudster may attempt to acquire personal information. As people across the U.S. anticipate the arrival of their COVID-19 stimulus check, we may begin to see an uptick in this sort of scam. Be aware that representatives of the Social Security Administration and the U.S. government do not request sensitive personal information over the phone.
  • Invoice Fraud Scheme: A fraudster may take advantage of these uncertain times by posing as a reputable foundation or corporate brand to request funds or donations with a fraudulent invoice. If you receive an invoice, from a well-known corporation or non-profit organization, that you did not request, always be vigilant and protect yourself when clicking on links, opening attachments or receiving false requests for funds. Any invoice sent to you should be reviewed to ensure that it is a legitimate invoice and one that you agreed to pay the requestor prior to receipt of the invoice.
  • Fake Debt Scam: A fraudster might contact you representing him or herself as a debt collector or court official, telling you that you must pay money that you don’t actually owe. Before taking any action, make sure to do some research into the claim by verifying the real numbers for the government agency, office or employee, and do not agree to wire money in order to pay back the debt.

How PayPal Can Help Victims of Fraud

If you believe your account with PayPal has been affected by fraud you can report the incident to PayPal through our Resolution Center where you can open a dispute. Examples of what you can report include:

  • If you notice unauthorized or suspicious activity from your account with PayPal, such as multiple charges for a single purchase or a different charge than what was shown on your receipt.
  • If you see a transaction that you did not authorize on your account with PayPal.
  • If you sent a payment to a PayPal merchant for a good or service, but haven’t received what you paid for, or believe that the seller may be fraudulent.

Additional Resources for Fraud Reporting

For any fraud you experience when using another payment method or platform, you can report the incident to a variety of governmental agencies, including:

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