BBB briefings released, warn that market volatility, scammers leave businesses and consumers vulnerable

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More than ever, businesses and consumers need to start with trust

COVID-19 has put more stress on consumers and businesses than ever before, and scammers are still using every ruse they can to swindle people. There are multiple factors, including stay-at-home orders, quarantines, COVID-19, and scams, that could lead to as much as a third of the economy being shut down.

Data from the University of California at Berkley shows that unemployment may rise to as much as 25 percent, and tens of thousands of small businesses are barely holding on. The Better Business Bureau conducted a pulse survey over 1,300 accredited businesses and recently published “A Comprehensive Report on the Impact of COVID-19 on Business.” Findings from the survey included:

  • More than 70% said that the Coronavirus would have a significant negative impact on their business.
  • Over 50 percent of businesses do not have enough cash or credit to survive more than 60 days in the face of an unexpected calamity, and 60 percent of businesses are searching for funding support options.
  • 36 percent of businesses say they will have to reduce staff, and 30 percent say they will have to change their business model. However, Hubspot found that, week-over-week, businesses that were able to pivot into a new business model were able to drive sales up by as much as 8 percent.

The briefing also touched on ways consumers can help support small businesses:

  • Reschedule, and commit to future business. Wherever possible financially, support local businesses who may have had to close due to stay-at-home orders by rescheduling appointments, or setting new ones.
  • Visit www.bbb.org/smallbusiness for more resources for small business owners during these troubled times.

A second briefing, released last week, showed that scammers are capitalizing on the fact that many consumers were forced to stay inside in April. These scammers are setting up fraudulent online shops and phisher social media ads for everything from fake coronavirus cures or prevention to high-demand items like toilet paper and facemasks. Find briefing infographic on page 12.

  • While only 14 percent of scams reported to the BBB in March were COVID-19 related, 58% of people reporting those scams lost money to them. This makes COVID-19/coronavirus scams one of the riskiest on the BBB Scam Risk Index.
  • 35-54 year olds are both most likely to encounter a scam and most likely to lose money, which shows that social isolation from family and friends contributes to the risk of falling victim to a scam.

How can consumers avoid coronavirus scams?

Educate yourself from official sources. Currently, there is no cure or prevention for COVID-19. Avoid any business claiming to offer a product for that purpose.

Ask someone else if the offer or situation seems like a scam. Often, simply taking the time to ask for another opinion breaks the sense of urgency and fear the scammer seeks to create and allows you to evaluate their claims.

Additionally, if the above scams weren’t enough – The Federal Trade Commission is warning consumers about another new scam to pop up: fake coronavirus testing sites. While these fake sites seem to have official signs and tents, their testing is anything but real. They may not follow CDC procedure, risking exposure to the virus. They may take consumers’ financial information, risking identity theft or unauthorized charges on your credit card bill. Worst of all, they are not able to provide consumers with the help that they need.

What can you do to stay safe?

Talk to your doctor if you have symptoms. Many people only display mild symptoms and may be able to recover at home.

If your doctor recommends testing, get a referral. That will ensure you’re only dealing with legit testing sites.

Report a fake testing site to your local police, the Federal Trade Commission at www.ftc.gov/complaint, and the BBB at www.bbb.org/scamtracker.

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