The Final Call

If you think you’re doing enough to guard against Covid-19, just by social distancing or wearing a mask, think again. That may protect against the disease but if you are not guarding yourself from fraudulent schemes and scams that some are using during this time to take advantage of the most vulnerable, you or someone you love may become the next victim.

Federal officials and government agencies are warning that these targeted scams are on the rise. The peddling of unsubstantiated or fake cures, price gouging of goods and services and investment scams and consumer complaints are just a few areas ringing alarms.

(L-R) District of Columbia Attorney General Karl A. Racine, D.C. Ward 7 Councilmember Vincent Gray, U.S. Attorney for the Western District of Virginia Thomas T. Cullen, Missouri Attorney General Eric Schmitt

District of Columbia Attorney General Karl A. Racine released the Office of the Attorney General’s “Coronavirus (COVID-19) Consumer Complaint Report,” on May 15 about problems D.C. consumers are experiencing during the city’s ongoing state of emergency.

The report analyzed 634 consumer complaints received by the attorney general’s Office of Consumer Protection from March 11 to May 11, more than double the number received in January and February. The report also high-lights that District consumers complained most about billing and cancellation issues and that health clubs and spas were the most complained-about industry.

“The Office of the Attorney General has taken immediate steps to make sure that consumers are treated fairly during the pandemic and is closely monitoring all incoming complaints for any potential disparities they reveal,” said Atty. Racine. “I urge District residents to contact our office if they believe a business or individual is treating them unfairly or trying to take advantage of them.”

The report detailed how consumers filed complaints about inflated prices for bleach and other disinfectant products, sold by both online and local businesses. Consumers also reported inflated prices for necessities such as toilet paper and paper towels, including one local business that was allegedly selling an eight-pack of paper towels for $35.00.

Complaints were also submitted about paying monthly membership fees at gyms, daycares, and parking garages, despite not being able to use those services due to coronavirus closures. Consumers reported that the lack of flexibility in their membership expenses made financial hardships even worse for patrons who lost income due to the pandemic.

Atty. Racine filed a lawsuit May 4, against Helen Mart, a convenience store in Ward 7, one of the poorest in the city for price gouging during the District’s state of emergency. In response to a complaint submitted in April, the attorney general’s office investigated and found the store was charging $12.99 for 121-oz. bottles of Clorox Bleach—200 percent higher than prices offered by other District stores that were charging $4.29 for the same product.

The closest grocery store to Helen Mart is just 1.5 miles away but it’s one of two major grocery stores in all of Ward 7. The average D.C. Ward has about nine grocery stores, according to Ward 7 Councilmember Vincent Gray. But in Wards 7 and 8 combined, there are only three serving nearly 140,000 people.

According to the attorney general, Helen Mart refused to comply with the cease and desist letter ordering the store to reduce its price. The lawsuit was the office’s first enforcement action against a company for price gouging during the Covid-19 pandemic.

“Price gouging in a time of a public health emergency is illegal, and the Office of the Attorney General will enforce the law against stores like Helen Mart that flatly refuse to adhere to a cease and desist letter that it received from my office,” said Atty. Racine.

“Residents who believe they are being overcharged should contact OAG. My office will file lawsuits to stop retailers from taking advantage of consumers’ urgent health needs during this crisis,” he added.

After the lawsuit was filed, a woman who identified herself as a manager at Helen Mart told a local NBC affiliate that the price had been lowered.

D.C. has recorded more than 120 price gouging complaints and sent 23 cease and desist letters to local stores since March 11.

Price gouging is not the only problem and the nation’s capital is not the only area where this is happening. “The rise in scams related to Covid-19 is getting bad enough that the FBI started sending out alerts in March, and has since issued detailed alerts regarding scams related to health care fraud, cryptocurrency and medical supplies,” noted forbes.com. “With shortages in personal protective equipment (PPE), the scams are now targeting business executives who are trying to procure PPE from non-traditional sources. Hundreds of online scams were recently stopped by the U.S. Justice Department. As people are spending more time online during the pandemic, cybercriminals are using this to their advantage,” reported a Chicago ABC affiliate. “Identity Theft Resource center said half of all scams it’s seeing are now related to social engineering, which is when scammers slowly gather your information on social media and open a line of credit or steal your identity,” reported abc7chicago. com. Security experts warn that people must be careful on sharing too much personal information online on social media platforms. “Social engineering scammers are using details like your high school, graduation year, hometown, grandmother’s name or mother’s maiden name to eventually use against you,” the network noted.

Shahzada A. Khan, purchasing manager for Lion Petroleum, Inc. which owns several gas stations told The Final Call he has had to increase pricing on PPE sold in their locations because the prices from distributers and wholesalers where they purchase supplies have also gone up.

“The prices are very high that the company is charging now for gloves and masks. We don’t make much profit because of the price.” He said because of the price increase, which he says is slightly above what they pay wholesale, the latex gloves, masks and hand sanitizer is not selling very quickly.

PPE price increases are passed along to those who can ill-afford to pay such high prices. The Society for Healthcare Organization Procurement Professionals (SHOPP) is a nonprofit that advocates and works with health professionals and facilities to ensure they are getting the best quality products and equipment.

Recently, the group compiled an analysis of emergency, unfunded, marginal PPE costs incurred by skilled nursing facilities and assisted living centers treating Covid-19 patients. Their calculations are based on current market pricing and guidelines of the Centers for Disease Control and Prevention.

Most products are produced in China and prices are above normal and because of the demand, the time to ship, freight cost and tariff tax added cause a big price increase that is passed along to consumers, explained Josh Silverberg, co-founder of SHOPP.

“One solution to help lower cost would be to start making things here in the United States. This will increase production and lessen the demand because of availability. Initially the cost will be higher until more purchases are made then the prices will go down,” he told The Final Call.

Purchasers also must beware of counterfeit supplies. According to the American Health Care Association and the National Center for Assisted Living, during the pandemic “supply offers from vendors or others may not be legitimate.”

“Providers are receiving vendor emails or other contact offering PPE supplies, and some may not be legitimate vendors or businesses,” the groups noted.

Consumers also need to be aware of financial schemes. In mid-April, the U.S. Attorney’s Office for the Eastern District of Virginia established a Virginia Coronavirus Fraud Task Force. “Fraudsters are chomping at the bit to steal your money,” said G. Zachary Terwilliger, co-leader of the task force and U.S. Attorney for the Eastern District of Virginia. “We have reports of criminals attempting to use various phishing techniques, including text messages, emails, and letters delivered through the mail, all attempting to steal your personal information or swindle you out of your economic impact payment,” he stated in a press release.

“Please be vigilant. Simply put: Hang up on robocalls, do not provide your personal identifying information to anyone, and always confirm you are accessing legitimate links from IRS.gov.”

For most tax paying Americans, the Economic Impact Payments will be directly deposited into their bank account. However, for those who do not have direct deposit, and other groups who usually received their tax refunds via paper check, they will receive their economic impact payment as a prepaid debit card.

“Americans will receive their economic-impact payments in one of two ways: through the mail or by direct deposit into their bank accounts,” said Thomas T. Cullen, co-leader of the task force and U.S. Attorney for the Western District of Virginia. “These payments do not need to be confirmed, authorized, or activated, and you should assume that any unsolicited calls or emails from individuals or entities who claim to be associated with the IRS are fraudulent.”

Doreen Hampton from Philadelphia was looking for information on how to connect her bank account to her Cash App account so she could send some of her stimulus check to her children who lost their jobs. She searched online for help.

“I’m really embarrassed by what happened. I thought I was connecting with Cash App customer service and gave them all of my banking information. The next day my account was drained. All that was there was my stimulus money that was a life line for me and my children,” she told The Final Call.

According to Federal Trade Commission data, as of May 20, Americans have lost $35 million from nearly 50,000 Covid-19 related scams reported to the FTC’s Consumer Sentinel Network.

In addition to financial scams there are health-related scams with companies and individuals making false claims of cures for Covid-19. The FTC announced May 21, it sent letters warning 50 marketers nationwide to stop making unsubstantiated claims that their products and therapies can treat or prevent Covid-19.

This is the fifth set of warning letters the FTC has announced as part of its ongoing efforts to protect consumers from health-related Covid-19 scams. In all, the commission has sent a similar letter to more than 120 companies and individuals.

Several of the letters target “treatments,” including Chinese herbal medications, music therapy, ozone therapy, and shields claimed to boost the immune system by protecting the wearer from electromagnetic fields. However, currently there is no scientific evidence that these, or any, products or services can treat or cure Covid-19.

The FTC details in the letters that one or more of the efficacy claims made by the marketers are unsubstantiated because they are not supported by scientific evidence, and therefore violate the FTC Act.

The letters advise the recipients to immediately stop making all claims that their products can treat or cure Covid-19, and to notify the Commission within 48 hours about the specific actions they have taken to address the agency’s concerns.

The letters also explain that if the false claims do not cease, the FTC may seek a federal court injunction and an order requiring money to be refunded to consumers.

Experts warn that scams are becoming more convincing and caution people to be very mindful in sharing any detailed information via emails, social media, on text messages or even verbally giving information to callers on the phone.

In New York, Attorney General Letitia James worked in cooperation with domain name registrars across the nation to—upon identification—remove websites selling, marketing, and promoting fraudulent goods and services related to Covid-19.

Kansas Attorney General Derek Schmidt and U.S. Attorney Stephen McAllister partnered in April to investigate and prosecute scammers attempting to prey on its citizens during the outbreak. The attorney general’s Consumer Protection Division will work directly with two prosecutors in the U.S. attorney’s office designated for handling Covid-19-related matters.

“Nationally, we have seen everything from people offering for sale respiratory masks they were not going to deliver to people seeking donations for nonexistent Covid-19 charities,” U.S. Attorney McAllister said. “We are not going to stand by while that happens in Kansas.”

On its website, the FTC gives recommendations on avoiding coronavirus scams. These recommendations include:

• Don’t respond to texts, emails or calls about checks from the government.

• Ignore online offers for vaccinations. There are no products proven to treat or prevent Covid-19 at this time.

• Be wary of ads for test kits. Most test kits being advertised have not been approved by the FDA, and aren’t necessarily accurate.

Hang up on robocalls. Scammers are using illegal robocalls to pitch everything from low-priced health insurance to work-at-home schemes.

Watch for emails claiming to be from the CDC or WHO. Use sites like coronavirus.gov and usa.gov/coronavirus to get the latest information. And don’t click on links from sources you don’t know.

Do your homework when it comes to donations. Never donate in cash, by gift card, or by wiring money.

(J.A. Salaam and Final Call staff contributed to this report.)