Shopper losses as a result of Covid-related fraud prime $500 million
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Consumer losses due to Covid-related fraud have topped $500 million, as criminals rip off the unwary in a variety of schemes ranging from online shopping to travel, according to data from the Federal Trade Commission.
The agency has received more than 558,000 complaints from consumers related to the pandemic since the start of 2020.
About 60% of the complaints were associated with fraud, citing an aggregate loss of $501 million through July 22. The typical person lost about $370, according to the agency.
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“Scammers always take advantage of disasters, manmade or natural,” said Susan Grant, director of consumer protection and privacy at the Consumer Federation of America, an advocacy group.
Criminals have used multiple avenues to steal money from unsuspecting Americans, including fraud related to online shopping, travel and government stimulus funds during the pandemic, according to federal data.
Covid consumer complaints
Meanwhile, price-gouging was the most commonly reported pandemic-related issue in 2020, according to state and local consumer agencies polled for a Consumer Federation report issued Monday. Consumers complained of being charged exorbitant prices for sought-after products such as hand sanitizer, toilet paper and masks.
Agencies also received Covid-associated complaints in a wide range of other categories, such as evictions, canceled events and travel, schools and childcare, the report said.
The true scope of consumer complaints and losses is likely much higher than official statistics, since the data is self-reported by consumers, Grant said.
“The complaints they receive are only the tip of the iceberg,” she said. “I think it’s safe to say it’s an awful lot of people.”
Online shopping accounted for the largest number of reported scams to the FTC — more than 53,000 complaints, or about 16% of the total that reported fraud.
Americans increased their online orders during the pandemic as they spent more time indoors. But many were victims of “opportunistic websites” claiming to sell popular items — anything from hand sanitizer to gloves, electronics, clothing and even puppies, according to the FTC. Customers order the item but then never receive it.
Victims lost the largest amount of total money ($77 million) to vacation and travel scams, say FTC officials. Most fraud relates to refunds and cancellations, the agency said.
Travel has rebounded as Covid vaccinations increase — and fraudsters have responded by creating fake airline ticket booking sites or customer service numbers, according to the Better Business Bureau.