People are equipped with everything they need to avoid becoming the victim of fraud, according to United States Attorney for the District of New Jersey Craig Carpenito: all they need is common sense.
If something sounds like a get rich quick scheme or something that’s too good to be true, like a cure for COVID-19, that’s probably what it is: too good to be true.
“There’s a dark underbelly of our society … that look at [how they can] take advantage of the situation,” Carpenito said. “It’s all about being diligent to avoid falling victim to those folks.”
Carpenito
Carpenito, Monmouth County Prosecutor Christopher Gramiccioni, Acting Insurance Fraud Prosecutor Tracy Thompson, and Acting Director of the Division of Consumer Affairs Paul Rodríguez spoke about COVID-19 related scams and the federal and state government’s enforcement efforts to stop them in a Tuesday webinar hosted by Attorney General Gurbir Grewal.
Price gouging, the sale of fraudulent personal protective equipment, and phishing scams have all been prevalent during the COVID-19 pandemic by bad actors. In some cases, Carpenito said, PPE has been marked up 700 percent. That’s the difference of a hospital system spending $2.6 million to purchase equipment to protect their workers compared to a fair price of $300,000.
Prior to COVID-19, there were six main distributors of N95 masks in the country. The bad actors gouging the prices are among distributors who have come online since the start of the pandemic. Others have sold masks purported to be N95 that weren’t actually, leaving people who think they’re safe at risk of catching and spreading the virus.
“This is not a one state problem, this is a 50 state problem. We have open investigations in 61 of 93 offices [nationwide], about 350 open investigations right now,” he said. “A lot of stuff is being imported from overseas, [and we’re] seeing major impacts in New Jersey and in Brooklyn, in California – cities where we have ports. We’ve seen this grey market pop up with a network of brokers that didn’t exist prior to COVID-19.”
Gramiccioni noted that much of the fraud in Monmouth County is targeted toward the elderly community, or 20 percent of its population. Funds, a trusting nature from time’s past, and limited experience in technology – they’re not scientific, and not across the board, noted Gramiccioni, but they’re three things that make a good opportunity for targeting.
Gramiccioni addressed grandparent scams, when a scammer calls someone and says, “Grandma? Is that you?” and the person on the receiving end naturally responds, “Chris?” or whatever the grandkid’s name is. Then they call, often at odd hours, often relating the call to the pandemic, with claims like “I lost my job. Can you wire me money?”
“Scammers, they follow the news. They put a COVID twist on [scams],” Thompson said. “We used to get grandparent scams like ‘I’m arrested’ or something, but now they call saying ‘I’m in quarantine.’”
Proactive messaging is important, Gramiccioni said. The Monmouth County Facebook and Twitter pages update followers on common scams.
“The goal is to have potential victims be hard targets. The goal is to try and get personally identifiable information. That’s what drives a fraud,” he said.
Attorney General Gurbir Grewal during a daily COVID-19 press briefing in Trenton on May 5, 2020. – JOSEPH LAMBERTI, COURIER POST
If a person is concerned someone asking for money or personal information on the other end of a phone call is a fraudster doing a so-called grandparent scam, Grewal suggests asking that person about a family pet or friend, or reaching out to another family member before wiring money.
“One of the fears I have is as recovery money begins to flow in, there’s going to be a whole host of fraudsters that are going to try to take advantage of that,” he said.
People are not going to ask you for your social security or bank info over the phone for you to get the federal relief funds, he noted.
Thompson noted that she anticipates an uptick in overcharging for medical services in the coming months, especially with increased telehealth services.
“We recommend the insured takes 10 seconds to write down the length of the call and what happened and discuss how long it was and who you spoke with … Then you have a record, Thompson said. “Take notes and compare to an explanation of benefits. Even if you’re not paying for it, we as a society are paying for it when there’s fraud in the health care system.”
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Fraud during the COVID-19 pandemic and how to avoid it - NJBIZ
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