If profiteers look to make a buck on others’ misfortune during times of crisis, the last couple of months have been open season.
“When people are desperate, they’re more ripe to be taken advantage of,” said Stephen Levins, executive director of the Hawaii Office of Consumer Protection.
The COVID-19 pandemic has created an opportunity for new scams, he said, including fake test kits, cures, phony charity donation requests, price-gouging and phishing attempts to steal federal stimulus money.
“These scams focus on all areas of consumer vulnerability in an attempt to capitalize on fear and rapidly changing developments,” Levins said.
And as the pandemic endures, Hawaii is seeing a spike, he said. Not all of them are reported to government agencies, as many consumers choose to simply ignore them or report to their financial institutions instead.
Just in the past few weeks, Levins said the Office of Consumer Protection has received about 190 complaints, most pertaining to COVID-19-related issues, including price-gouging and travel refunds.
“We’re investigating every single COVID-19 complaint that’s coming in,” he said.
Kenji Price, the U.S. Attorney for the District of Hawaii, said his office also is looking into these types of illegal activities. Price said they’re a priority for his office in Hawaii but also high on the list for the U.S. Department of Justice.
“There are people who are clearly preying upon those who are vulnerable and need help,” he said. “And that’s happening across the country.”
State and federal agencies, as well as private entities like utility companies and banks, have been warning people about COVID-19-related scams since the early stages of the pandemic.
The most common scams include standard phishing ruses that try to put malware on people’s computers and steal personal or financial information, Price said.
Federal agencies have been concerned about one involving stimulus checks.
The Internal Revenue Service and the U.S. Treasury Department, among other agencies, have been warning the public against calls or emails from people impersonating government workers asking for Social Security numbers and bank account information.
No such action is required to receive the stimulus check. The IRS says most people don’t need to do anything, but some taxpayers who typically do not file tax returns may need to.
The Justice Department has also warned against fake treatments. In April, a federal court in Dallas, Texas, entered an injunction to shut down an “ozone therapy center” that claimed to treat COVID-19.
Not only is there no cure for the virus — there is no specific treatment other than supportive care, said Dr. Erlaine Bello, an infectious disease specialist at The Queen’s Medical Center.
So when businesses claim to provide products, treatments or drugs that cure or treat the disease, people should be very skeptical, she said.
“They should really not be taking any of them except in a setting of a research clinical trial,” Bello said.
A legitimate research trial would be sponsored by a reputable research organization that provides informed consent documents, she added.
Price said his office is partnering with state and federal authorities to combat COVID-19-related scams. Some of those agencies include the local offices of the Federal Bureau of Investigation, the Department of Homeland Security and the state Department of Commerce and Consumer Affairs.
“We basically want to identify and we want to combat frauds and scams related to COVID-19 using the full spectrum of state and federal tools,” he said.
The federal prosecutor declined to say whether there were active criminal investigations against any suspected COVID-19 scammers in Hawaii.
“We’re watching, observing and investigating,” he said.
The Honolulu Police Department said in an email earlier this week that it has not had any reports of COVID-19-related scams.
But Hawaiian Electric says it has seen a surge in fraud reports. The utility has been putting out news releases and social media posts warning its customers of scammers trying to capitalize on the fear of COVID-19 by posing as agents and threatening to shut off service.
Shannon Tangonan, a Hawaiian Electric spokeswoman, said that since March 20, the company has received about 240 fraud reports from its Oahu customers. Five people have actually paid fraudsters.
“Any kind of threat of disconnection, whether it’s via text or phone, is a scam,” she said.
Hawaiian Electric has suspended service disconnections through June 30 and offers payment options for those who are dealing with financial hardship because of the virus.
Levins, the state consumer protection director, said new scams could flourish when the pandemic begins to subside.
For example, he anticipates a spike in foreclosure rescue operations in which fraudsters induce struggling homeowners to make payments to them with the false promise of getting them out from under debt.
“Under both state and federal law, you can’t ask for money in advance until after you’ve performed everything you said you’re going to do,” he said. “That’s a huge red flag.”
At least for now, many financial institutions are allowing delays in mortgage payments, but at some point, if homeowners are not back on their feet, Levins said they’re going to have to address their inability to pay.
“That’s when it’s going to be important to seek good relief from people who aren’t trying to rip you off,” he said.
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