Originally published on the Verisk Financial | G2 blog.
As COVID-19 engulfs the US, increasing numbers of unethical internet merchants are targeting consumers who are homebound, anxious—and online. According to DomainTools, over 100,000 high-risk coronavirus-related domain names have been created since January.
G2 analyzed these domain names and looked for trends. We found the following:
In the months of January and February, potential fraudsters registered fewer than 12,000 COVID-19-related domain names. As the scope of the pandemic became widely known and consumer panic set in, scammers came out in droves. Since March 1st, over 91,000 potentially fraudulent domain names related to COVID-19 have been created. This exponential growth matches what the Federal Trade Commission has reported. As of March 31, the FTC had received more than 7,800 coronavirus-related scam reports from consumers. Shockingly, this number doubled the previous week’s total. According to the agency, consumers reported losing a total of $4.77 million in coronavirus-related fraud, with a median loss of almost $600.
Prior to March, there were virtually no coronavirus-related domain names that included the terms “compensation,” “funds,” “loan,” “stimulus,” or “cash.” Since March 1, thousands of domain names have been created that contain these and related terms. Again, this aligns with the types of scams that have recently been reported to the FTC. In the weeks leading up to the disbursement of $1,200 coronavirus relief checks, we will likely see an increase in “early access” (and similar) schemes.
Fraudsters have registered hundreds of websites with names that suggest they sell medicine to treat COVID-19; however, the vast majority of these websites are not yet operational. This may mean that illegal pharmacy networks are reserving these websites until one or more treatments is proven effective or gains significant media attention. Of the fully functional websites, almost all appear to be held by well-known rogue pharmacy networks who are merely adding COVID-19 content to already existing platforms.
Other Healthcare Scams
G2 found thousands of COVID-related websites that use terms like “treat,” “natural,” “remedy,” and “herbal.” Some of these websites sell products marketed with fraudulent claims to treat or prevent COVID-19. To date, the FDA and FTC have issued 16 warning letters to companies making these types of bogus claims. Significantly, the FTC has also issued letters to third parties, including Voice over Internet Protocol (VoIP) service providers, warning against “assisting and facilitating” illegal coronavirus-related telemarketing calls.
To learn more about COVID-19 challenges affecting the payments industry, please attend G2’s webinar series, Payments at a Social Distance, which has been developed in partnership with leading payments industry experts. Sessions will address a variety of topics, including consumer and merchant impacts, rising risk threats, and best practices for maintaining business continuity.
Sign up here: https://www.g2llc.com/payments-at-social-distancing/