A Fake Startup, COVID Fraud & Empty Boxes 💸

Have you been schemed out of precious dollars by some pretend machiavellian online? 

You’re not alone. 

According to data from the Federal Trade Commission, consumer losses due to COVID-related fraud have topped $500 million. The FTC has received more than 558,000 complaints from consumers related since the start of the pandemic. The typical person lost about $370. 

Means and Mediums

Criminals have used multiple avenues to steal money from unsuspecting victims, including fraud related to online shopping, travel and government stimulus funds.

Online shopping accounted for the largest number of scams reported to the FTC - more than 53,000 complaints, or about 16% of the total reported fraud. Customers complained that they would order an item online, bet never receive it. Most f these items were essentials, such as hand sanitisers, toilet paper, and masks, that had exorbitant prices in local stores ( a practice called price-gouging). According to a recent Consumer Federation report, price gouging is one of the most popular money-making avenue since 2020. 

Agencies also received COVID-associated complaints in a wide range of other categories, such as evictions, canceled events, school fees and childcare.

Meanwhile, victims lost the largest amount of money ($77 million) to vacation and travel scams, say FTC officials. Most fraud relates to refunds and cancellations. Especially now that travel has rebounded with increased vaccinations — fraudsters have responded by creating fake airline ticket booking sites or customer service numbers, according to the Better Business Bureau.

Breathometer is a portable device working with a smartphone app that measures blood alcohol levels (a portable breathalyser). It was founded by Charles Michael Yim and aired on Shark Tank in Season 5. The idea sounded so great during the show's pitch that all 5 sharks wanted a piece of the cake. Kevin O'Leary, Mark Cuban, Daymond John, Lori Greiner and Robert Herjavec together invested $1million in the company for 30% equity. 

However, the business ran into a lot of problems after the deal. They had trouble fulfilling all the orders they were receiving, and after a short while it turned out the device didn’t work as advertised. The results the device was giving were not accurate and occasionally it reported a blood alcohol level far below the actual value. This is a big problem because it could encourage people to drive even when they are in no condition to do so. The FTC got involved and ordered Breathometer to make full refunds to all its customers (and take the product off the market). Mark Cuban called it the “worst execution in the history of Shark Tank” and blamed the founder for miss-spending the capital.

Despite this being a significant failure, the company is still alive (albeit its unknown if the sharks are still in on it). It is currently pivoting and advertising a new (yet similar) product – Mint, which is supposed to measure biomarkers associated with bad breath and gum disease. 

• UK, US and EU have accused China of a major cyber-attack on Microsoft Exchange servers affecting 30,000 organisations globally. 
• Vaccination not compulsory, but masks mandatory - says Goldman Sachs to staff returning to the London office this week.
• University of Exeter offers first year medical students £10,000 and free accommodation to defer their studies to 2022.  
• This new startup uses vibrations created by mobile phones, moving vehicles, trains and even humans to produce electricity in W. Africa.     
• Despite Musk's court controversy, Tesla made a record $1.1 billion in Q2 - 250% higher than the $438 million earnings of Q1. 
• Consumers abandoning their online product searches costs the e-commerce industry $300 billion a year - acc to Google. 
• Podcast listening on Spotify increased 30% YoY. The company's podcast ad revenue rose by 627%. 
• Weird News - A Florida man tried to walk to New York on water. Obviously, he failed.