Is the risk of being scammed great now, with the pandemic? Has anything changed?
The risk of falling victim to a scam has increased during the pandemic. Con artists use emotion to perpetrate fraud, and the epidemic has consumers fearful of their health. Plus, many are now facing unexpected economic hardships. Scams we’ve seen surge over the past seven months involve PPE purchases, stimulus payments, grants, loans, employment opportunities and pets.
In 2015, online purchase scams made up a little more than 10% of all cons resulting in a monetary loss for consumers. We’ve already seen that number jump to 64% this year.
Among consumers who reported an online purchase scam in 2020, 80% ultimately lost money, up from 24% last year. Discounted prices and product scarcity motivated consumers to purchase with a company they didn’t know.
The riskiest purchase is pets, with scammers taking advantage of people’s loneliness. Employment and unemployment fraud also increased during the pandemic. Employment scams target money and personal data – information that leads to identity theft – of job seekers in our state.
The unemployment fraud involved taking advantage of the significant lay-offs throughout the country, and they took the unemployment fraud one step further by using victims from other scams to funnel the money.
What are the most common disputes the public brings to the BBB?
Most of the complaints we’ve received in Hawaii since the start of the year have been directed at the airline industry. Other businesses that have seen complaints increase include car dealerships, online retailers, vacations rentals and real estate.
Online shopping complaints increased by nearly 900%, followed by vacation rentals with 300%. Airlines experienced a 100% jump in complaints.
With the economy locked down, travel and vacation companies received an unprecedented amount of cancellations and required time to resolve issues. Complaints connected to online retailers were mostly a result of store closures and consumers’ fears of contracting coronavirus.
How would you describe the role the BBB plays, and what types of complaints are your expertise?
The BBB’s purpose is to increase marketplace trust between businesses and consumers. Our Standards of Trust require businesses to consistently demonstrate trustworthiness within the areas where they operate. A company should have appropriate licensing, advertise honestly, honor promises, safeguard customer privacy, and be transparent with and respond to customers. We also call out unethical business practices and highlight doing the right thing.
Our dispute resolution process involves conciliation, mediation and arbitration. During the conciliation phase, we facilitate back-and-forth discussion between parties while maintaining a neutral position. While the majority of disputes are resolved in the first phase, we do offer mediation as well as binding and non-binding arbitration options. The ultimate goal is a resolution of the issue for the company and consumer. We offer these services in all industries
Are there any government fixes you would like to see now?
We have been working with both the Small Business Administration and the Hawaii Chamber of Commerce to assist small businesses during the economic crisis. Those collaborations have created opportunities to educate local companies on government resources that are available right now. Any additional assistance options that can help small business are efforts we support.
What can BBB do to support small businesses that have struggled to survive?
Trust is essential right now. Consumers are nervous about shopping due to increases in fraudulent marketplace activity and the fear of COVID-19. Companies are encouraged to focus on making consumers feel safe with both their money and health.
At BBB, we provide businesses with educational opportunities via webinars and articles highlighting CDC guidelines for reopening, safeguarding consumer data, customer service best practices, consumer communication and other topics. BBB has also focused on business needs, including PPP loan procurement, pivoting, financial planning, marketing, management, human resources and other matters during the pandemic.
Economic recovery will take time, and BBB is positioned as a resource for businesses as they navigate a changing marketplace.
Consumers need trust when purchasing and provide companies with the necessary tools to showcase trust. According to the U.S. Small Business Association (SBA), small businesses make up 99.99% of all American companies. For small businesses to recover, we encourage all residents to shop locally. As individual consumers, we can make a difference for a local small business.
THE BIO FILE
>> Title: Hawaii marketplace manager, Better Business Bureau, Northwest-Pacific, a role for promoting trust in the marketplace via media, strategic relations, business and consumer education.
>> Education: Bachelor of science in business administration with a concentration in accounting from Mount Olive College in North Carolina
>> Community activities: Executive Women International Honolulu Chapter, board adviser; National Kitchen and Bath Association (NKBA) Aloha Chapter Council member; Building Industry Association (BIA) Hawaii Membership committee member
>> Personal: Married to Tim Freitas; three children, two grandchildren and two adorable dogs.
>> One more thing: I have taught Jazzercise for 27 years.
>> Guilty pleasure: Binge-watching Netflix and puzzles.