Second Wave of Stimulus Checks Brings More Scams

The second wave of stimulus checks only started hitting checking accounts a few weeks ago, and the BBB  and the FTC are already warning of related scams.

According to the FTC, American taxpayers lost more than $211 million due to COVID-19 scams, with $20.9 million of that amount connected to the first round of stimulus checks.

Don’t get scammed! Protect yourself by learning all about these scams so you know when you’re being targeted.

How the scams play out

Stimulus check scams can take the form of phishing scams, in which a criminal asks victims to provide personal information to receive their check, and then instead uses that information to empty the victim’s account.

In other variants of the stimulus check scam, a victim receives an email prompting them to download an embedded link to receive their check.The link, of course, will infect the victim’s computer with malware.

In yet another stimulus check scam, a criminal impersonates an IRS official or a representative of another government office demanding a processing fee before the check can be sent.

Finally, there have been reports of taxpayers receiving checks that appear to be authentic stimulus checks, but are actually fraudulent. They deposit the check and, soon afterward, a scammer reaches out to them to inform them the check amount was incorrect and they must return some of the funds. Unfortunately, a few days later, the financial institution finds that the check is fake and it will not clear. The victim is now out the money they returned to the “IRS.”

Red flags

Unfortunately, technology has made it easy for scammers to spoof a Caller ID and to create bogus websites that look authentic. If you know what to look for, you can beat them at their game and recognize a scam before it gets past the first step.

Here are five red flags of stimulus check scams:

1. Unsolicited calls or emails

It’s best to avoid answering unsolicited calls and/or emails from unknown contacts to protect yourself from a stimulus check scam. Similarly, never click on a link in an unsolicited email or text message, as it may contain malware.

According to the BBB Scam Tracker, scammers have also been contacting people through robocalls and leaving messages about the stimulus checks and direct deposits. These calls should likewise be ignored.

2. Messages that ask you to verify or provide sensitive information

The BBB is warning of emails and text messages asking citizens to verify or supply information to receive their stimulus checks. Sometimes, the victim will receive an email instructing them to click on a link to receive their benefit payments. This, too, is a scam. The IRS will not call, text or email any taxpayer to verify their information.

3. High-pressure tactics

If a phone call or email demands immediate action on your part and uses a threat of losing your stimulus payment, you’re likely looking at a scam. There is no action you need to take to receive your check.

4. Fee solicitations

There is no processing fee or any other charge attached to the stimulus payments.

“If you do answer a call, and it’s about your stimulus payment, keep in mind that U.S. government agencies won’t ask you to pay anything up front to receive your funds. Anyone who does is a scammer,” cautions Jennifer Leach, associate director for the FTC’s division of consumer and business education.

There’s also no way to pay extra for receiving your stimulus payment earlier.

5. Inflated check amount

“We’ve seen a lot of scams involving bogus checks that look like government checks in the past year,” says Paige Schaffer, CEO of global identity and cyber protection services at Generali Global Assistance.

For the best way to protect yourself from this scam, the BBB recommends that all taxpayers receiving their stimulus payment via paper check verify that the check is authentic before depositing it in their checking account. Look up the agency or organization that allegedly sent the check to see if it really exists, and check the status of your payment to see if you actually should have received it.

Stay safe!

Your Turn: Have you been targeted by a stimulus check scam? Tell us about it in the comments.

Learn More:
wwmt.com
marketwatch.com
cnbc.com
bbb.org

Don’t Let Scammers Get Your Stimulus Check!

coronavirus cares act flyer with 20 billsMillions of Americans have received or are awaiting a gift from Uncle Sam to help them get through the coronavirus pandemic. As part of the Coronavirus Aid, Relief and Economic Security (CARES) Act passed on March 27, the federal government is sending out $290 billion in stimulus checks over the next half a year.

The first round of checks made its way to millions of checking accounts across the country during the second week of April and the next round is expected to be sent within a few weeks. The remainder will be mailed out over the following 20 weeks.

Unfortunately, scammers are doing all they can to get their hands on these checks before they reach the rightful recipients. The best way to keep your money safe from scammers is to arm yourself with information about the checks and to learn how to spot the scams.
To help you keep every dollar that’s coming to you and avoid falling victim to these scams, Advantage One Credit Union has compiled this comprehensive guide on the stimulus check process and the connected scams.

Important information about the stimulus checks
Many Americans aren’t aware of this crucial fact: You do not need to take any action to receive your stimulus check. There is no form to fill out, no number to call, and no information to share. Every eligible citizen should receive the check without having to take any action.

The feds are using the most recent tax filing information they have from each eligible citizen to send out the checks. They will use information from 2019 tax returns to determine the check amount and get recipients their money. Those who haven’t yet filed taxes this year (the tax deadline has been extended to July 15), will have the information from their 2018 taxes used. Social Security recipients, and anyone else not required to file taxes, do not need to take action either; the government already has their information on file.

There is no need to share information, such as a Social Security number, checking account number or home address, with anyone. There is no need to “sign up” for your check either. All you need to do is wait for your check to land in your mailbox or in your account. Remember the simple rule: There is no need to take any action to receive your check.

When you may need to take action
The only exception to the above rule applies to those who have not yet filed taxes for 2018. These citizens may need to submit a simple tax return to receive their check.
Also, the government has shared that it can only deposit the money directly into checking accounts if it has this information on file for the recipient. This criterion includes nearly all citizens who’ve received a tax refund for the taxes they filed in 2018 or 2019. Individuals receiving their checks via direct deposit will likely have their money sooner. Consequently, many people want to share this information with the IRS before the checks are sent out. It can be done via this link, which can also be used to look up the status of your check. Unfortunately, though, many people have reported that the IRS site has not been working properly recently, which is likely due to heavy traffic.

How the scams play out
The scammers trying to nab stimulus checks count on victims thinking they need to take action to get their checks. They use a variety of means, including phone calls, emails, text messages and social media posts, to ask victims to share information that will allegedly enable them to receive their checks. They may ask for the victim’s Social Security number, date of birth, PayPal account information, checking account details, home address or other personal information, claiming it is a necessary “sign up” step in the stimulus check distribution.

Alternatively, they may claim they can help you receive your check earlier through their website if you share certain information with them. They’ll often use sophisticated spoofing methods to make it appear as if they are legitimate government representatives. Once they have this information, though, they will reach out to the IRS to change your information so your check goes directly into their own accounts. Or, they may hack your account to withdraw the stimulus money as soon as it arrives.

If you receive any phone calls or messages asking for your personal information so you can receive your check, you are looking at a scam. Do not respond. Report the scam to the FTC at ftc.gov. The federal government has made it clear it will not be reaching out to citizens and asking for information before sending out checks. It has also shared that there is no way for anyone to gain early access to the stimulus check money.

Stay safe!

Your Turn:
Have you been targeted by a stimulus check scam? Tell us about it in the comments.

Learn More:
consumer.ftc.gov
usatoday.com
irs.gov

How Should I Spend My Stimulus Check?

Handwritten budget figures on notepadThe stimulus checks promised in the Coronavirus Aid, Relief and Economic Security (CARES) Act are starting to land in checking accounts and mailboxes around the country. The $1,200 granted to most middle class adults is a welcome relief during these financially trying times.

Many recipients may be wondering: What is the best way to use this money?
To help you determine the most financially responsible course of action to take with your stimulus check, Advantage One Credit Union has compiled a list of advice and tips from financial experts and advisers on how to use this money.

Cover your basic life expenses
First and foremost, make sure you can afford to cover your basic necessities. With millions of Americans out of work and lots of them still waiting for their unemployment insurance to kick in, many people are struggling to put food on their tables. Most financial experts agree that it’s best not to make any long-term plans for stimulus money until you can comfortably cover everyday expenses.

Charlie Bolognino, CFP and owner of Side-by-Side Financial Planning in Plymouth, Minn., says this step may necessitate creating a new budget that fits the times. With unique spending priorities in place, an absent or diminished income and many expenses, like subscriptions and entertainment costs, not being relevant any longer, it can be helpful to reconfigure an existing budget to better suit present needs. As always, basic necessities, such as food and critical bills, should be prioritized.

Build up your emergency fund
If you’ve already got your basic needs covered, start looking at long-term targets for your stimulus money.

“I would immediately place this money in my emergency fund account,” says Jovan Johnson, CEO of Piece of Wealth Planning in Atlanta.

Emergency funds should ideally be robust enough to cover 3-6 months’ worth of living expenses. If you already have an emergency fund, it may have been depleted during the pandemic and need some replenishing. If you don’t yet have an emergency fund, or your fund isn’t large enough to cover several months without a steady income, you may want to use some of the stimulus money to build it up so you have a cushion to fall back on during lean times that are likely to come in the months ahead.

Pay down high-interest debts
According to the Federal Reserve Bank, Americans owed a collective $930 billion in credit card debt during the fourth quarter of 2019. Using some of your stimulus check to pay off high-interest debt would be a great way to get a guaranteed return on the money, says Chris Chen, of Insight Financial Strategists in Newton, Mass.

This advice only applies to credit cards and other private, high-interest loans. The federal government put a 6-month freeze on most student loan debts, so they should not be as high a priority right now.

Boost your savings
If your emergency fund is already full and you’ve made headway on your debt, it can be a good idea to use some of the stimulus money to add to your Advantage One Credit Union savings account. The money in your savings can be used to cover long-term financial goals, such as funding a dream vacation or covering the down payment on a new home.

Consider all your options before choosing how to spend your stimulus money. In all likelihood, this will be a one-time payment received during the pandemic. If you need further assistance, feel free to reach out to us at 734-676-7000 or news@myaocu.com. We’ll be happy to help you maintain financial stability during these uncertain times.

Your Turn:
How are you spending your stimulus check? Tell us about it in the comments.

Learn More:
marketwatch.com
bankrate.com