COVID-19 scams exploiting government funding programs such as CERB

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May 22, 2020 – Many Canadians are experiencing financial hardship as a consequence of the current pandemic. The Canadian government launched the Canada Emergency Response Benefit (CERB) to help out Canadians throughout the Coronavirus crisis with a multi-billion dollar payments program. However, the CERB comes with an elevated risk of fraud. The CERB is a temporary income-support program launched on April 6 from the Canadian federal government for people who have stopped working or have reduced income due to the COVID-19 pandemic. The CERB provides Canadian residents a taxable benefit of up to $2,000 per month for up to four months and has seen over 8 million applicants. Fraudsters are taking advantage of times of crisis such as the global pandemic. Between March 6 and May 1, the CAFC received 766 reports linked to COVID-19 scams by 188 victims who lost a combined $1.2 million.

CERB phishing scams

The Toronto police issued a warning against fraudulent text messages requesting banking information in order to process government payments for CERB. The unsolicited text claims that the receiver was being sent government benefits, asking to click on the attached link to obtain the money.

There are a variety of texts circulating which are all designed to try to get the receiver to click on the link. The text contains key phrases like ‘a payment has been issued’, ‘financial relief’, ‘receive your benefit’, or ‘the CRA is ready to deposit your relief fund.’

CERB is a help from the government of Canada to help the citizens that are having a hard time during this global pandemic, we have sent out 1208.54 (CAD).

Example of a fraudulent CERB phishing scam text message.

The texts always contain links to websites that look like webpages of the Canadian government, but they are just bogus replica. The fraudsters often use a link shortener to cover the actual landing page. On these pages, the text recipients are asked for their personal and financial information such as name, SIN number, and online banking credentials.

Some links lead to a website which looks like a sign-in page of banking institutions to harvest their victims’ bank card number and their online banking password. After they ‘signed in’ with their banking information, they are asked to answer a list of other personal questions.

(Canada Federal Financial Aid) A payment has been issued to help citizens and our economy fight against Covid-19.>>

Example of a fraudulent CERB phishing scam text message.

The CAFC confirmed that about 450 of the 630 fraud complaints they received around the beginning of April were related to text message phishing. Authorities urge the public that the departments of the government of Canada are not going to send out text messages like this. Anybody who receives an unsolicited text related to emergency benefits is advised not to respond or click on the provided links.

Scam targeting seniors advertising fraudulent applications

The Vancouver-area MP Don Davies pointed out to the prime minister that thousands of seniors in his riding were lured into applying for the CERB without qualifying for it. In a letter to the federal government, he describes that a woman identifying herself as Joanne as well as another individual working with her, have allegedly been contacting at least 77 elders in a Vancouver-area seniors residence. They allegedly offered a service to sign the seniors up for an undisclosed government benefit in exchange for a ten percent fee.

Read more: Don’t fall for COVID-19 frauds

According to Davies, the targeted seniors were either unaware that the advertised benefit was the CERB or that they likely do not qualify for the government funds since seniors who had not been working are not eligible. Most of those targeted in this particular scheme did not meet the CERB requirements.

Cynically, the seniors who signed up for the CERB with the bogus service will have to pay back the received benefit to the federal government, and additionally lost the hundreds of dollars in fees they were convinced to pay. Furthermore, they disclosed personal information to the dubious service such as their social insurance number and their date of birth, which leaves them at risk of identity theft and fraud.

‘This immoral and unethical scheme is likely illegal and I understand the Vancouver Police Department is looking into the matter,’ wrote Davies in his letter to the prime minister and demanded to ban third parties from collecting fees for assistance with CERB applications as a consequence.

COVID cheque fraud

The Israeli security company ‘KELA Research’ informed that they discovered various offerings for cheques claimed to resemble those of CERB, inviting fraudsters to profit by receiving potential funding.

Criminals began selling editable digital copies of CERB cheques ‘on a credible and well-known Canadian-focused underground market.’ The fraudster can either purchase a digital file and fill in their own name or have the criminal do the editing for them.

The fraudster can then deposit the scans or prints of lookalike government cheques into their so-called ‘drop’ accounts, typically via mobile deposit. In doing so, the fraudster can avoid an ID check, which is necessary since their drop account is usually a fraudulent account that has been opened with fake ID and is used for various money transactions.

According to KELA Research, the CERB cheque fraud is just an extension of other Canadian cheque fraud schemes available.

Business grants and loans

The CAFC and the Northwest Territories RCMP are warning especially business owners against fraudulent loan scams. The reporting of fraudulent loan websites is increasing amid COVID-19, according to the CAFC.

Those fraudulent websites appear to be legitimate lending companies, which guarantee a loan for a fee with slogans such as ‘good credit, bad credit, apply now!’ Once quickly approved, the fraudsters will request a fee to secure the loan. The victim never receives any money and thanks to the provided personal information through their fraudulent loan application, they are now more vulnerable to identity theft and fraud.

A similar scheme advertises ‘free money’ through special access to government grants. Through ads, claiming the recipient may qualify for the grant, scammers lure people looking for small and medium-sized business financing, on websites that look like official government sites. They often use government of Canada logos, wordmarks, and the Canadian flag. Sometimes they even have official-sounding names.

After their victims applied for the grant, they receive a confirmation that they qualify for the program. However, in order to get the money, an upfront fee needs to be paid. The CAFC points out that these grant offers are completely fake and no money is ever received by the victims.

Read more: Investment scams in the COVID-19 era