Ebola crisis spurs rash of scams
The Ebola epidemic is spurring a swarm of scams that promote bogus "cures," fund fake charities and spread computer viruses aimed at stealing private information.
In fraud alerts issued Friday by both the Better Business Bureau and the AARP Fraud Watch Network, experts said they'd uncovered a range of schemes targeting people looking for Ebola news, cures and ways to help. The disease has killed an estimated 4,500 people primarily in Africa and is now showing up in several cities around the globe.
"Scammers prey on fears during the worst of circumstances, and the Ebola crisis is no different," said Kristin Keckeisen, director of the AARP Fraud Watch Network.
Some of the newly discovered Ebola scams:
- Emails that purport to supply the latest news on the Ebola crisis actually link to malware sites that infect your computer with viruses.
- Bogus charities that claim to aid Ebola victims, but are either fake or direct only a fraction of contributions to the stated cause.
- Sales of "personal protection kits" and or "natural cures" for the disease, with the products often sold over websites that peddle conspiracy theories.
- Stock scams that promote questionable companies supposedly working on cures or products that will prevent spread of the disease.
Although there are legitimate companies developing Ebola drugs and making hazmat suits, investors should beware. Most are early-stage companies with thinly traded stocks. Investing in these enterprises is, at best, a long-shot.
Consider, for example, Lakeland Industries, a small New York maker of protective clothing. The company's shares, which had been trading at around $5 apiece for years, quadrupled after a Texas hospital admitted its first Ebola patient. However, the company has lost money for the past three years, with little to support the share price. Without panic-inducing news, the stock was down almost 20 percent on Friday.
The best advice for not falling prey to Ebola-related scams is familiar:
Don't click on email social media links from unknown senders, particularly if they promise "shocking" news that you haven't heard before.
Make sure your computer security software is updated. It should warn you if you visit a site that's loaded with malware.
Investigate charities before you write a check. All charities legally operating in the U.S. must file forms with the Internal Revenue Service and should be willing to provide you with their so-called 990 report. This shows how much the charity collects and how it spends its money. If a charity is unwilling or unable to provide these details, walk away.
Also realize that well-established groups, such as Doctors Without Borders, the Red Cross, Catholic Charities, World Vision and Mercy Corps have established networks around the globe and are in the best position to know how to help. New charities, no matter how well meaning, may not be able to address the crisis as effectively as those that are already up and running.
Invest for the long-term. Biotechnology companies are working on potentially groundbreaking medications for a wide array of diseases that are far more common than Ebola. While Ebola is big news, meanwhile, it has not yet infected enough people to make it a big market. If health officials are effective in preventing its spread, it may never create a market large enough to generate profitable corporate sales. Stocks are a long-term investment. Don't buy them based on a short-term crisis.
