COVID‐19 frauds: An exploratory study of victimization during a global crisis

• Published date: 01 August 2021
• Author: Jay P. Kennedy,Melissa Rorie,Michael L. Benson
• Date: 01 August 2021
• DOI: http://doi.org/10.1111/1745-9133.12554

DOI: ./- .

SPECIAL ISSUE ARTICLE

THE IMPACT OF COVID-19 ON CRIME AND JUSTICE

COVID-19 frauds: An exploratory study

of victimization during a global crisis

Jay P. Kennedy1Melissa Rorie2Michael L. Benson3

Michigan State University, East Lansing,

Michigan

University of Nevada Las Vegas,Las

Vega s, Neva da

University of Cincinnati, Cincinnati,

Ohio

Correspondence

JayP. Kennedy,Michigan State University,

Auditorium Dr.,  BakerHall, East

Lansing,MI  .

Email:jpk@msu.edu

Fundinginformation

MichiganState University College of Social

Science,Grant/Award Number: COVID

SmallGrant Competition.

Abstract

Research Summary: The COVID- pandemic

threated public health and safety and led to a number

of virus-related fraud schemes. We surveyed over ,

American adults to investigate their experiences with

COVID--related frauds. Our goals were to better

understand fraud targeting and victimization, as well as

the impacts of fraud on victims. Over a quarter of our

sample reported purchasing either a COVID--related

product or a service, yet .% reported feeling targeted

for fraud. Being a target of COVID- frauds is signif-

icantly linked to one’s routine activities, however it is

one’s level of self-control that more strongly predicts

victimization. COVID- anxieties mediate the impact

of self-control on purchasing.

Policy Implications: Legal interventionsand increased

regulations surrounding advertising are a potential

mechanism for protecting consumers, yet “soft” inter-

ventions that interrupt routine activities might be more

useful and applicable. The use of white-lists and publicly

available websites that allow e-commerce sites and sell-

ers to be verified would help enable higher levels of self-

guardianship. It is also important to provide continuous

and clear messaging about what is being done to protect

consumers.

KEYWORDS

fraud, COVID-, self-control, routine activity theory

Criminology & Public Policy. ;:–. ©  American Society of Criminology 493wileyonlinelibrary.com/journal/capp

494 KENNEDY  .

In late January of both the U.S. government and the World Health Organization declared

COVID- to be a public health emergency,and in March of  the World Health Organization

officially announced that COVID- was a global pandemic (World Health Organization, ).

One year later in the United States alone there were over  million confirmed cases, and nearly

, deaths. The more than half a million victims of COVID- represent an ever-present

reminder of the catastrophic harm posed by the virus. However, parts of the U.S. government’s

response to these harms have been described as “about as organized as a ferretdance party” (Lee,

), a situation that was not helped by official government sources touting conspiracy theo-

ries about the benefits of unproven chemical treatments (Radcliffe, ). The fact that much

of the misinformation being spread originated with, or was supported by, then President Trump

(Facher, ) created a confusing stream of messaging for consumers. This mixture of confu-

sion, misinformation, and fear created a fertile context in which COVID--related frauds could

proliferate.

From the very beginnings of the COVID- crisis, criminals sought to take advantage of the

lack of information available regarding the virus, misinformation coming from official and unof-

ficial sources, and disinformation spread via the Internet and social media channels. Chief among

the disinformation campaigns are the coronavirus conspiracy theories propagatedby QAnon that

have spread untruths about the virus and left many Americans with a deep distrust of the federal

government (Collins, ; Spring & Wendlins, ). During the early stages of the pandemic

the U.S. Food and Drug Administration and Department of Justice were busy issuing warnings

to consumers regarding the dangers of COVID- frauds. These warnings were in part a reaction

to frauds that had been detected early on, as well as a way to prepare people for the schemes that

would likely develop in the coming months.

U.S. government and law enforcement officials were well aware of the speed at which oppor-

tunists would take advantage of the crisis. In response, federal agencies launched coordinated

initiatives to mitigate the risks facing U.S. consumers. Indeed, just five daysafter the WHO’s pan-

demic declaration William Barr, then U.S. Attorney General, issued a memorandum that read, in

part:

In addition to ensuring that the justice system can continue functioning during the

current national crisis, it is essential that the Department of Justice remain vigilant

in detecting, investigating, and prosecuting wrongdoing related to the crisis. In par-

ticular, there have been reports of individuals and businesses selling fake cures for

COVID- online and engaging in other forms of fraud, reports of phishing emails

from entities posing as the WorldHealth Organization or the Centers for Disease Con-

trol and Prevention, and reports of malwarebeing inserted onto mobile apps designed

to track the spread of the virus. The pandemic is dangerous enough without wrong-

doers seeking to profit from public panic and this sort of conduct cannot be tolerated.

Every U.S. Attorney’sOffice is thus hereby directed to prioritize the detection, inves-

tigation, and prosecution of all criminal conduct related to the current pandemic.

(www.justice.gov/coronavirus/DOJresponse)

A year later, these warnings persist (U.S. Department of Health and Human Services,

) as the threat of virus-related frauds have not abated, and the schemes themselves have

evolved in response to law enforcement activity and the progression of the virus throughout

society.

KENNEDY  . 495

One of the biggest challenges for federal law enforcement agencies during the pandemic has

been keeping consumers informed of the growing and ever-shifting threats posed by frauds. The

continued engagement of federal agencies in consumer-focused messaging has been necessary

because of the ease with which criminals are able to find new victims. Yet, these agencies are

finding out that it is much more difficult to influence consumer decision-making than it is to

simply raise awareness about risky behaviors. One factor is the scope of the crisis – unlike a hur-

ricane, wildfire, or other natural disaster that has localized impacts on a particular subset of the

population, COVID- is truly a global crisis, making the pool of potential victims much bigger.

Relatedly,the U.S. government is giving crisis-relief funds out to a much larger group of individu-

als and businesses than ever before. These factors, in addition to unique individual-level aspects of

the virus response (i.e., consumer fears about the virus, increasing reliance upon the Internet for

news, information, and commerce, and the spread of misinformation and disinformation about

the virus; Fleming, ) seem to provide an ideal environment for virus-related frauds. This is

highlighted by the fact that just four months into the pandemic, the Federal Trade Commission

estimated that COVID- frauds had cost American consumers as much as $ million (Iacurci,

). Twelve months into the pandemic, COVID-frauds are estimated to have cost consumers

more than $ million (Waggoner & Markowitz, ).

According to the U.S. Department of Justice (www.justice.gov/coronavirus), the individuals

most at risk for COVID- fraud victimization are individuals who have already been victimized

by identity theft, those who have had their personal information exposedin a past data breach, and

individuals who gave out their personal information in response to solicitations inquiring about

citizens’ need for help with filing unemployment insurance claims (for which citizens would pay

a fee). While the types of frauds being perpetrated – financial frauds, cyberattacks, product coun-

terfeiting, price gouging, and the sale of fake medical treatments – are generally similar to those

committed before the crisis, there is a unique callousness to the currentschemes. This callousness

comes from the fact that so many individuals are directly targeted for victimization and that these

fraud schemes prey upon those impacted by a global pandemic that has led to more than half

a million deaths in the United States alone. Furthermore, easy access to computers and mobile

phones and the growth of social media platforms have brought counterfeiters directly into most

American’s homes.

Given the ongoing threat posed by COVID- frauds and the ease with which those who oper-

ate these fraud schemes are able to interact with and solicit consumers, it is important to study

COVID frauds from the standpoint of victimization. Our study is partially exploratory in nature

and partially a test of two criminological theories relevant to fraud victimization. The exploratory

aspect of our study looks to identify what factors differentiate consumers who are targeted by,

and those who ultimately became victims of, COVID- frauds. Drawingfrom criminological the-

ory, we also investigated fraud targeting and victimization using routine activity theory and self-

control theory. As we explain in greater detail below, drawing from routine activity theory we

hypothesize that the nature and extent of one’s activity on the internet and social media influ-

ences the likelihood of exposure to some sort of fraudulent solicitation regarding COVID-. In

addition, drawing from self-control theory we hypothesize that among those who are targeted

by fraudulent schemes, persons with low self-control will be more likely to fall prey to a scheme

than those with higher levels of self-control, because low self-control is associated with impulsiv-

ity and high risk-taking proclivities. The results suggest that both routine activity and low self-

control have important influences on feeling targeted for, as well as being a victim of, a COVID-

 fraud. Importantly, the Internet also plays a prominent role in facilitating both targeting and

victimization.