Scammers seem to flourish wherever there is suffering and panic.
Not surprisingly, the Coronavirus has brought them out like flies to a rotting carcass. The most popular new swindles involve imposter scams and money mule schemes.
Imposter scams occur when a criminal poses as an official from the IRS, CDC, WHO, nonprofit or healthcare provider and solicits money or valuable information. One tactic involves the imposter contacting the victim via phone or email demanding personal and financial information as part of “COVID-19 contact tracing” efforts. Another scam has the imposter demanding that the victim give bank account information so that government stimulus payments can be deposited in the account. Yet another is a phishing scheme, where the email or text appears to come from a legitimate source like the IRS and includes a “notice” that is actually a virus-laden attachment or link.
Red flags include requests for money via gift card or prepaid card, sending a bogus check or prepaid debit card with instructions to contact the government agency with financial information to obtain more money, unsolicited communications, and email addresses with an unexpected domain – such as .com instead of .gov – for a supposed government email.
A “money mule” is a person who deposits illegally acquired money. These schemes are often packaged as good-Samaritan, romance or work-at home deals. They are especially dangerous because the victim becomes part of a criminal enterprise with the scammer. A red flag is a schemer’s request that the victim deposit money and then move all or some of the money elsewhere. Unlike in an imposter scam where the victim just loses money, the victim in a money mule scheme could end up convicted of a federal crime.
While we are on the topic of unsolicited phone calls, take a look at the Supreme Court’s decision on robocalls in Barr v. American Association of Political Consultants (the “AAPC”). It was a huge loss for the winning party and a huge win for the consumer.
There were two laws in play: a 1991 law that prohibited robocalls and a 2015 law that carved out an exception for government debt collection.
The AAPC, who wanted to make political robocalls, complained that the 1991 law was a violation of free speech because, thanks to the 2015 law, only the government was allowed to make robocalls. The AAPC wanted the entire 1991 law prohibiting the robocalls tossed.
The Supreme Court agreed that the law was not fair but it did not buy the AAPC’s proposed remedy. Instead, it simply tossed out the 2015 law. As a result, all robocalls, even those by political parties, are illegal.
Pretty sure that is not going to stop robocalls, but at least everyone now recognizes they are illegal.
Now for the estate planning strategy. Life insurance proceeds that have not been pledged as collateral are exempt from the insured’s creditors, even if they end up in the insured’s probate estate. This makes life insurance an excellent vehicle to leave an inheritance or equalize an estate among beneficiaries. When you review your estate planning documents (you do have a current will and powers of attorney, right?) keep that in mind.
Virginia Hammerle is a Texas attorney whose practice includes estate planning, guardianship and probate. Sign up for her newsletter at firstname.lastname@example.org. Contact Hammerle Finley Law Firm to schedule a consultation at hammerle.com.
This column does not constitute legal advice.