Financial fraud and exploitation are common ways for investors, consumers, and business people to lose assets. Unfortunately, the economic downturn that has affected much of the world due to the coronavirus pandemic has come with a rise in schemes that threaten the stability of many investors’ wealth. This is especially true as many malicious thieves make claims regarding investment opportunities for coronavirus healthcare, cures, and similar fakes.

At Global Asset Management in Seoul, Korea, we are dedicated to understanding the ebbs and flows of global markets, including the risks involved with financial exploitation. For more information, contact our investment strategists.

Types of Common Fraud Situations

The United States Consumer Financial Protection Bureau has issued warnings about exploitative behavior that may arise due to the COVID-19 pandemic. As investors navigate potential financial opportunities, knowing about prevailing scams can help them avoid pitfalls. Below are some of the most common.

Charity Schemes

A particularly sinister scheme, this type claims to be earning or collecting money for charities designed to help victims of coronavirus. In these situations, you might receive a call or email regarding some kind of donation or charitable giving that you allegedly made in the past to a specific (fake) organization. If you do not remember providing any such donation, that might be a red flag that you are being taken advantage of.

Additionally, it is advisable to donate to well-known or verified charities rather than charities with which you are unfamiliar.

Home Test Kits

One reported con involves false claims that the scammer is delivering a coronavirus test kit, vaccine, or even cure to your home. They may also pose as a developer of a vaccine or quick-result testing procedure and solicit funds from you. Remember: there currently is no known cure for COVID-19, no vaccine, and all tests are handled by government and medical professionals. There is no situation in which test kits are mailed or sent to citizens’ homes, so this should never be taken as a serious opportunity or investment.

Government Imposter

Given that many governments around the world have issued economic stimulus packages to citizens in order to offset some of the financial hardship that has arisen due to coronavirus, some financial crime perpetrators have begun to pose as government officials. The goal, often, is to get money from scam victims by claiming to need payment for expedited stimulus checks, tax mistakes, or other issues.

Importantly, the government never simply calls or texts about these kinds of problems. Also, economic stimulus money is not expedited for an additional fee. If someone claims that this is the case, they likely are lying to you in the hopes of getting your money.

Tips For Avoiding Fraud

There are several ways to avoid falling prey to scammers and fraudsters. These are not simply investment risks or run-of-the-mill risk management situations. They are serious crimes that can drastically impact an investor’s life, so additional steps must be taken to ensure financial stability.

Avoid Wiring Funds

Using money-wiring services like Western Union can be risky if you do not personally know the person to whom you are sending the money. The reason for this is that wire transfers often have little to know methods of recourse to get your money back. Instead, official organizations and above-board companies should allow payments through bank transfers, credit cards, or other systems that have built-in financial protection measures.

Google Search Is Key

Additionally, any investment or transfer of funds should be accompanied by some serious research. You should not make an investment or send payment to a company or organization that you are unfamiliar with. Before any transaction takes place, do an online search for customer reviews, name recognition, and information on the organization’s infrastructure (address, email, phone number, and even names of its leaders). This can help you avoid fraudsters who set up fake companies.

The best way to avoid being taken advantage of financially is to make sound investments with the aid of a risk management or asset management company. Based in Seoul, Korea, Global Asset Management uses a system that has seen significant, consistent results for our clients. Contact us to learn more.

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