Since the start of the pandemic, there’s been a surge in the number of money-making schemes and online scams. The economic hardship faced by people around the world has made more consumers vulnerable to these schemes, which often offer the chance to earn money.
In light of this, the Federal Trade Commission (FTC) and various partner agencies have launched a new initiative in the US, which has been named “Operation Income Illusion”.
This targets online scams involving people being offered “guaranteed” income or financial independence. There’s been an increase in people falling for these scams, as millions of people around the world have lost their jobs due to the pandemic.
The FTC crackdown will include over 50 law enforcement actions to deal with operators of these types of scams. This includes investment and employment scams, fake coaching courses, and pyramid schemes, which can end up costing the victim a lot of money.
In the last four years, consumers in the US alone have reported losing $610 million in these types of scams. In the first nine months of this year, the figure is over $150,000.
How are consumers targeted?
Scams have been circulating on social media for many years. But, these types of scams prey on the vulnerable and those facing financial difficulties like unemployment and loss of income.
When consumers are being asked for money in return for a guaranteed income source or work, such as stuffing envelopes, a medical billing business, or a system for an internet business, these are usually fake. People should report these posts to a relevant authority.
Another common type of scam is someone offering to provide business coaching to set up a business or operate a franchise. Some of these are legitimate, but it’s important to approach them with caution, especially when the seller is asking for a large fee.
Lastly, pyramid schemes being passed off as multi-level marketing (MLM) are becoming more common. In these cases, the scammer will often use deceptive tactics to get the person to sign up, like promising extremely high income without explaining what’s required to achieve it.
The FTC’s new scheme should provide additional support in stopping these online scams by finding operators and attempting to get the money back for those affected. The FTC has also noted that it’s essential for consumers to remain vigilant and look for the warning signs.