$36 billion lost in self-employed benefits scam: Internet Scambusters #951
The stormy economy is driving more people to become self-employed and run their own businesses.
But along with that growth comes a new wave of scams, including a $36 billion rip-off from a package that's supposed to help gig workers who find themselves out of work.
In this week's issue, we'll highlight the most common scams doing the rounds right now and tell you how to deal with them.
Let's get started…
Self-Employed? Beware These Costly Scams
Millions of Americans who've either lost their jobs or are working in the so-called gig economy have become a mouthwatering target for scammers.
In one case, crooks have scammed more than $36 billion earmarked for self-employed people in what has been described as "the largest fraud attack on the US ever."
The Pandemic Unemployment Assistance (PUA) program was set up to help the self-employed and gig workers by providing benefits if their work dried up. But because of the scale and urgency of the help, intended to be a form of unemployment benefit, some of the money has ended up in the wrong hands. Scammers have been using victims' names and business details that have been stolen on the Internet to claim up to $20,000 a time.
If the victim subsequently needs to file a genuine claim for financial support, they may find it is denied because money has already been paid out. Worse, they could find themselves potentially responsible for repaying money they've never received.
In some cases, the benefits were paid out without adequate security checks on the claimant, but all states are now required to have new security procedures in place from February 1. However, this has created a new problem -- the possibility of a delay in payments just when they're needed most.
The program is due to end in April, but it could take months to unravel the results of some of these scams.
The money is being paid through individual states' unemployment insurance programs. If you think you've been on the receiving end of this fraud, contact them.
At the same time, some self-employed individuals and small firms have fallen into the grasp of high-interest lenders who, while operating inside the law, may bury some of their costly terms in the small print of contracts -- or fail to disclose them at all.
For example, private lenders offering what are known as merchant cash advances have come in for criticism on this front. Their repayment terms often include a percentage of future sales, high interest rates, or weekly repayment withdrawals from borrowers' bank accounts.
Again, there is no suggestion these are unlawful. But because they're not strictly considered to be loans, these advances are not subject to some of the stringent regulations for conventional borrowings.
So, make sure you take professional financial advice before seeking business loans or a merchant advance and then ensure you know and understand fully what this financial help will cost you.
More Self-Employed Scams
About 10 million people label themselves as self-employed in the US, while another 30 million are running small firms. Some of these people are tasting the freedom of being their own boss for the first time -- but their inexperience makes them vulnerable to scammers.
Some of the scams currently doing the rounds include:
- Business advertising con tricks: Victims are lured into paying for ads in brochures, programs and calendars, which either don't exist or have only a tiny print run. The scammers may also falsely promise no competitors will be allowed in the same publication. And they use high-pressure sales pitches.
If you're approached about this kind of advertising, check out the promoter thoroughly, ask to see previous examples of their publications, and then contact some of their advertisers. Make sure you get everything in writing.
- Extortion: Website owners who allow Google pay-per-click ads to be placed on their pages receive threats from scammers that they will have them banned by Google. The crooks threaten to bombard the ads with clicks, which will make it look like the site owner is trying to defraud the web giant.
If you receive this type of threat, you should contact Google immediately and make them aware you're being targeted.
- Package delivery notification: This is a variation of a well-established scam. In this instance, victims get an email telling them to schedule a delivery from Amazon Business. The message doesn't specify what the supposed shipment is, but it contains a link that takes recipients to a fake Amazon page that steals their sign-on information.
We always advise against clicking links in emails. But if you do and you're taken to a sign-on page of any type, don't try to sign in. Instead, verify and visit the genuine site (e.g., amazon.com) and check from there.
- Fake trademark notifications: Many new businesses want to protect their brand by registering a trademark with the US Patent and Trademark Office (USPTO). The organization reports a big rise on fake emails claiming to be from them and advising recipients to pay a large sum or face losing their trademark.
Or the crooks may claim there's a new policy requiring victims to register their name, even if they don't need to. They sometimes offer a registration service, with a hefty fee upfront -- that's in addition to the genuine USPTO and legal fees that can total up to around $1,000.
If you own a trademark and receive one of these notifications, check it against USPTO's own searchable database.
Alert of the Week
Although Apple devices are generally regarded as more secure than other computers and mobile devices, users are not immune to troubles.
For instance, Mac and iPhone users have recently reported strange pop-up notifications asking them to re-enter their Apple IDs and passwords.
Sometimes these requests are legit. But if you're not sure, check out this article on how to tell from MacWorld.
Time to conclude for today -- have a great week!