How scammers could use coronavirus scare to steal your money

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How scammers could use coronavirus scare to steal your money

The health of your wallet could be at risk as the new coronavirus spreads to new parts of the globe.

Consumers are warned that they could soon be inundated with fake products, phony stock deals, fabricated emails, texts and social media posts that are designed to steal money and personal information. 

Fraudsters love to play into our fears.

Michigan Attorney General Dana Nessel and the Michigan Department of Health and Human Services warned that scammers could be asking for donations for potential victims, providing advice on unproven treatments or providing phony information via social media. 

The threat of the coronavirus is real, Nessel said in a statement, but there have been no confirmed cases in Michigan.

The U.S. Securities and Exchange Commission also issued an alert to warn of investment schemes that could pitch products or services that will be used to help stop the coronavirus outbreak.

The SEC stated: "You may lose significant amounts of money if you invest in a company that makes inaccurate or unreliable claims. You may not be able to sell your shares if trading in the company is suspended." 

One red flag is a small company, or what's called a microcap stock, which is priced low, relatively unknown and only makes very limited information available to the public. 

"This can make it easier for fraudsters to spread false information about the company and to profit at the expense of unsuspecting investors," the SEC stated. 

Crooks can pump up that stock price by spreading false rumors. The promoters make money by dumping the stock or selling it before the hype ends. Then, the stock price tumbles, leaving innocent investors holding the bag. 

The Federal Trade Commission warns that scammers can create fake charities or crowdfunding sites to steal money from consumers.

"Don’t let anyone rush you into making a donation. If someone wants donations in cash, by gift card, or by wiring money, don’t do it," the FTC warns. 

Consumer watchdogs offer the following advice:

  • Don't click on links, especially if an email appears out of the blue.
  • Be extra cautious when it comes to emails that claim to be from the Centers for Disease Control and Prevention. 
  • Ignore online offers for vaccinations.
  • Don't fall for "investment opportunities" relating to any hot news item, such as the coronavirus. 

Contact Susan Tomporat  313-222-8876 or Follow her on Twitter @tompor. Read more on business and sign up for our business newsletter.


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