FTC cracks down on coronavirus scams

FTC Commissioner Noah Phillips discusses cracking down on coronavirus scams. He joins Yahoo Finance’s On The Move panel to weigh in.

Video Transcript

- And as we watch this coronavirus pandemic unfold, there is a possible uptick in scams and attempted scams. We are joined now by Noah Phillips, he is a commissioner with the Federal Trade Commission. He's joining us on the phone. So Noah, what do people need to be aware of when it comes to potentially predatory behavior at this time?

NOAH PHILLIPS: Julie, thanks for having me. What we know about scam artists is that they follow the headlines. So people need to understand that a lot of the nerves that they're having about their job, about the economy, about their health, and so forth are going to be reflected in the kinds of scams that people will type try to perpetrate.

So small businesses are facing scams associated with the SBA scams, associated with IT. People are facing scams associated with health-- claims that cures are available or vaccines are available or tests are available. Fraudsters are going to take advantage of whatever people are worrying about, and right now, a lot of Americans, small businesses, consumers alike, are really worried.

ADAM SHAPIRO: Hi, this is Adam Shapiro. Thank you for joining us, Mr. Commissioner. And I'm curious-- what does it look like? What do these scams-- how do they play out, without naming anybody, unless you can? How do they do it?

NOAH PHILLIPS: So scams happen in a lot of different ways. They can happen over the phone, say with robo calls. And we've been looking at that very carefully and taking some actions. That can happen over email, and that could be links that can introduce malware onto your computer, or just pings to try to get your information or even money from you.

The important things that people need to understand, in particular with respect to the government, is that the best information you can get is from the government directly. So if you've got a small business, and you need a loan, and you're looking to the government for help, don't rely on someone to contact you without solicitation. Go to the SBA's website and get better information from there.

We've always had scammers and we've always had fraudsters. But what we've seen is a tremendous uptick in the number of scams, the number of frauds that relate to coronavirus. And with that uptick are much higher numbers in the levels of harm that people are reporting. So this is scary stuff.

MELODY HAHM: Commissioner Phillips, Melody Hahm here. And you say that often, these scammers follow the headlines. Perhaps this will be a controversial statement, but a lot of those headlines come directly from the president's mouth and a lot of his cabinet members. We know that Doctor Fauci had been seen as a reliable source for that scientific information that you're saying people should be listening to. How do you reconcile when there are sort of different mouthpieces and there is distrust from the government?

NOAH PHILLIPS: Our message is that people should go to the official sources for the information that they need. And if that's information about money you're getting from tax authorities, say, stimulus checks, go to the IRS. If it's information about SBA loans, go to SBA. If it's information about health, CDC and FDA. Those are very important sources that people can go to.

If you're being contacted by someone you don't know or you're getting an email from someone you do know and it looks suspicious, that's a time where you should have some concern about the contact that you're seeing. And it might be a scam.

- So I would ask you, I mean, have you actually seen an uptick in this kind of activity? Or is this sort of more a defense-- offense, if you will-- excuse me-- mixing up my sports metaphors. You know, has there been some sort of a flood of complaints to the FTC about this stuff?

NOAH PHILLIPS: We've seen a dramatic uptick in the number of coronavirus-related complaints. And we've seen an uptick in the amount of harm that people are reporting. So what this tells us is that a lot of people who are involved in scams and frauds in general are pivoting to coronavirus, because they're trying to predicate the interest in whatever they're selling on the current fears that Americans are having.

We're very focused on scams involving the government. So I mentioned before the Small Business Administration, and we brought a case a few weeks ago in Rhode Island, a company that was claiming that it could help small businesses get loans from the government, and was looking for data from them. And people find that they're being asked to put up money or that a private company can expedite money that they would receive from the government-- those are all red flags for scams. We're also seeing a lot of claims about health, false cures, and that sort of thing.

DAN ROBERTS: Hi, Commissioner, Dan Roberts here. Thanks for joining us. Well, we have you, we want to definitely get an update, if you can share one, on the report yesterday that the FTC is looking into these security concerns with Zoom. And obviously, amid coronavirus quarantining, many, many people and businesses are relying on Zoom. Can you tell us anything more?

NOAH PHILLIPS: So my understanding is those reports came from the chairman's remarks in front of the Energy and Commerce Committee in the house. And I believe what the chairman said was that if you read about it in the news, it's safe to assume we're looking into it. We don't comment as a general matter on pending investigation, and so there's not much more beyond that that I can say.

- All right, Noah, thank you very much. Apologies for the pause there. Noah Phillips is a commissioner at the Federal Trade Commission. Thank you so much for joining us. Appreciate it.

NOAH PHILLIPS: Thanks for having me.