Multiple Stimulus Checks Lead To Increase In Financial Scams: Experts Warn Consumers About New Fraud Methods

stimulus check

One of the negative effects of Stimulus Checks has been the rapid increase in financial fraud. The scams began right after the first round of stimulus checks. Americans lost over $211 million to COVID-19 fraud and stimulus check scams. This was revealed by the Federal Trade Commission which reported that by the end of 2000, the agency had received around 275,600 complaints.

While the number of frauds reported showed a decline by the end of 2000, the second round of stimulus checks led to another surge in online and offline financial scams. 

The signing of the $900 billion pandemic relief package under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was followed in quick succession by the third stimulus check.

The second round of stimulus payments of up to $600 per individual went out also to dependent children under the age of seventeen. 

The payments started to phase out for those with an individual Adjusted Gross Income of above $75,000 and for married couples filing jointly if the Adjusted Gross Income exceeded $150,000.

But with each of the economic impact payments, there has been an immediate surge in the number of stimulus check scams. 

Experts have termed each round of stimulus checks as “the perfect storm” for scammers out to make a dishonest dollar. Both the federal and state governments put out regular notices cautioning the public about the increased potential for scams. 

They warned that financial scammers were always innovating, always on the lookout for fresh opportunities, such as the passage of another round of federal stimulus checkers to scam Americans

Experts have warned of five major red flags that they say could signal an attempt to scam you of your stimulus check. 

Impersonation is one of the major ways that scammers cheat you. Advance in spoofing technology has made it easier than before for scammers to impersonate anyone and that includes government agencies. To shield yourself against such scams, experts advise that consumers avoid picking up any calls from unfamiliar phone numbers. Instead, they should be forwarded to voicemails for further scrutiny.

Financial experts say that people should be very wary of any phone classes or inbound emails that are supposedly from government agencies like the Treasury Department, the IRS, or state unemployment benefit agencies. 

If you get a call, and you think that it could be from a government agency, you should go for a different channel of communication to confirm the call. For instance, contact the agency through an email or number that you trust or are familiar with. This is a safer option than replying directly to an email or calls that you find suspicious or with which you are unfamiliar.

For those who do accept a call or open an unknown email, it is important to keep in mind that no government agency asks for any form of personal information. If the caller or the sender of the email does any of this, it is apparent that they are scammers. 

Further, no government agency will call, email, text, or contact you through social media to get you to share your Social Security number, credit card number, or bank account. If the caller or the sender at the other end tells you to reveal information, be assured that you have been targeted by a scammer. 

Messages That Ask To Verify Or Provide Information Is Very Likely Trying To Steal Your Stimulus Check

When it is about text messages and emails, in both cases, customers should be wary of those that promise them better benefits and make sure that you get all payments owed to them. This is normally a way for scammers to steal your details and leaves you vulnerable to potential identity theft, the Bureau warned in a release. 

Another surefire way to know that a call is coming from a scammer is if they try to convince you that they need personal information immediately. It is a red flag that if somebody asks you to share something immediately or if they threaten you that you will forfeit your stimulus checks if you do not divulge the information they need. 

Experts warn that you should not be rushed into revealing any sensitive information or be forced to pay upfront for gaining or buying something. 

Scammers Speak Of A Certain Fee To Get Your Stimulus Check

One form of fraud that is doing the rounds is scammers offering faster or more payments. All they claim is a small processing fee. And they convince their victims to use either a gift card or a prepaid debit card. But officials in the federal administration have warned that there is nothing as getting your payments early for a fee. And there is no chance of getting more in your stimulus check by paying someone a fee. 

So if someone promises you either, you can be sure that it is an attempt to scam you and is lying. There has also been an upsurge in offers of a cash advance at exorbitant interest rates that in the end add up to more than what you would be getting in your stimulus check. 

If someone promises you a cash advance against your stimulus check, you can be sure that the terms and conditions underlying it will be on terms that will not benefit you in the long run. 

Another scam that made a comeback after the second round of stimulus checks was the menace of phony stimulus checks. Earlier there has been an epidemic of bogus checks that closely resemble government checks. This started right after the first round of stimulus checks. 

Typically, the scam begins when a recipient receives the stimulus check and deposits it into his bank. But once the victim deposits the amount he receives a call from the scammer posing as an IRS official. The scammer informs that the victim had received an extra amount in his check. 

By the time he is informed by the bank of the scam, he is out of both the amount of the stimulus check and the amount he paid the scammer as a refund for the excess payment.