How to Avoid Falling Victim to Scams During Economic Uncertainty

In challenging times, opportunists often exploit vulnerabilities. Stay alert and informed to safeguard your finances and well-being.

Valentina Zebnitskaya

Head of the federal legal firm "StopDebt".

During periods of instability, scam activities tend to increase, and the COVID-19 pandemic is no exception. Here are key tips on how to navigate crisis situations without falling into debt traps.

1. Avoid Unlicensed Lenders at All Costs

The sharp decline of local currencies and the ongoing pandemic have negatively impacted economies worldwide. Small and medium businesses are among the hardest hit, with many shifting employees to remote work or unpaid leave. Demand for services has dropped, potentially leading to higher unemployment rates after the pandemic.

For many, borrowing money or taking out a loan is the only way to survive these tough times. It is crucial to avoid unlicensed lenders—organizations without proper credit licenses or those not registered with central banking authorities. These entities operate without regulation, leaving you unprotected.

Often, these are fraudsters masquerading as credit institutions or microfinance organizations, offering loans with exorbitant interest rates or demanding collateral.

This also includes private individuals offering loans under informal agreements, which can leave you financially vulnerable and at risk of losing your assets.

Typically, elderly individuals trying to help their families and entrepreneurs with poor credit histories fall prey to these schemes.

Unlicensed lenders often embed hidden clauses in contracts that grant them rights to seize your property for missed payments, deliberately setting you up for default.

They may falsely promise waived payments or free deferrals without documentation, only to later claim your collateral or impose heavy penalties.

2. Exercise Caution When Buying Used Vehicles Privately

The automotive market has seen increased activity recently, with some sellers eager to liquidate assets and buyers viewing vehicles as long-term investments.

Beware of deals that seem too good to be true. Purchasing a vehicle from someone facing bankruptcy at below-market prices can result in the sale being invalidated by courts, as undervaluing assets harms creditors.

This may lead to the vehicle being repossessed, and you might have to pursue legal action to recover your money, which is often difficult as bankrupt sellers typically lack funds.

To avoid this, verify if the car is under any liens or collateral by checking official vehicle registration databases.

Never agree to undervalue the sale price in contracts to reduce taxes or fees. Always declare the actual transaction amount to ensure your rights are protected in case of disputes.

3. Stay Vigilant Against Pandemic-Related Scams

The pandemic has given rise to new fraudulent schemes involving extortion, intimidation, and fake medical services.

• Fake travel assistance: If you need to book flights urgently, contact airlines directly. Avoid intermediaries demanding upfront payments for guaranteed tickets, as these are often scams.
• False promises of loan relief: Beware of brokers or attorneys charging fees to secure payment deferrals or debt forgiveness. Such decisions are made solely by banks after reviewing your documentation. Submit requests properly through official channels.

• Fake COVID-19 cures and disinfection services: No approved cure exists yet. Do not purchase miracle remedies or allow strangers into your home for disinfection, which is only conducted in public spaces by authorized personnel.
• Requests for personal information: Be cautious if contacted by someone claiming you were exposed to the virus and demanding passport or bank details. These are common phishing tactics.
• Fraudulent rapid COVID-19 tests: Ignore ads selling quick tests. Testing is provided free by government health facilities or reputable private clinics if you have symptoms or exposure.

Remain cautious and protect your personal and financial security during these uncertain times.

*Note: Meta Platforms Inc. and its social networks Facebook and Instagram are restricted in certain regions.

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