Fraudsters love to prey on vulnerable populations. As the U.S. federal government enters month two of a shutdown, the closed down FTC isn't able to provide assistance, or issue fraud warnings to consumer and financial institutions.

During a time when consumers are increasingly desperate to get paid, or seek out loans, this is when it's common to see an increase in fraudulent financial schemes. Outside of the fact that the FTC's website isn't actively responding to identity theft complaints (at least not until the government reopens), there are a number of other fraud schemes that consumers and financial institutions should be aware of.

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Where to Report ID Theft?

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Identity theft is continuous problem for financial institutions and consumers. The biggest problem during the shutdown? The FTC isn't there to respond to complaints. The FTC typically receives thousands of complaints weekly regarding ID theft, so there's a big unknown about what's really happening while the agency is shut down. The Do Not Call Registry is and the Consumer Sentinel Network (used to help law enforcement track complaints) is also shut down.

"You can’t put information in, you can't get anything out, and so the bottom line is the FTC is not currently able to help consumers or law enforcement agencies with identity theft issues," said Susan Grant, director of consumer protection and privacy at the Consumer Federation of America

Typically, the site IdentityTheft.gov is a place where consumers can report issues, but if you go to the site today, you'll find this message:

“Due to the government shutdown, we are unable to offer this website service at this time. Information about identity theft can be found on the FTC’s website at: Identity Theft | Consumer Information. We will resume normal operations when the government is funded.”

It's worth noting that consumers can still report the theft, but shouldn't expect it to be addressed in a timely manner. Credit reporting agencies are still operating as normal as they are not part of the government. Consumers can still freeze their credit and any accounts at any time without any charge.

It's also worth noting that the Consumer Financial Protection Bureau operates under funding not controlled by Congress, which means it is still open and accepting complaints about financial companies.

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Beware of Fake Lender Scams

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Another area fraudsters tend to pray on during this time is consumers desperate for loans. Online lending scams are particularly prevalent during this time and consumers should be hyper-aware of which type of online lending sites they are looking for. Scammers posing as lenders steal personal information and often get people to send them money to open up accounts that end up being part of a fraud scheme. Attorney General's offices are warning about these types of scams tied to loans.

“As the government shutdown enters its fifth week, it is important for Virginians, especially those who work for the Federal Government, to be vigilant and pay close attention to potential scams,” said Virginia Attorney General Mark Herring. “Unfortunately, individuals will capitalize on federal workers’ vulnerabilities and lack of income during this time and try and take advantage of them. People who are affected by the government shutdown have enough to worry about and should not also have to worry about a scammer preying on them. My consumer protection team and I will continue to do all we can to protect Virginians from getting ripped off and taken advantage of.”

Since the FTC isn't enforcing anti-robocalling regulations during this time, there's a greater chance that telemarketing scams increase. Phishing scams are more likely to run rampant during this time, as are fake alerts from the FTC. It's easy for consumers to be tricked into these schemes, which is why it's up to financial institutions to remind customers of the common loan and credit card scams that can increase during times when there is less enforcement.

“Just remember that no reputable lender is going to enter into an agreement without doing a credit check, so if anyone says, 'no credit check, we'll do it free, right now,' that's definitely a red flag,” said Amy Noftzinger with the AARP Fraud Watch Network.

Especially during times when consumers are uncertain bout their financials, Financial institutions must educate cardholders on making safe purchases and monitoring their cards frequently. For FIs, it’s important to implement real-time monitoring for fraudulent or unusual patterns, increase customer interactions, and minimize re-issuance disturbance. On both a long and short-term basis, FIs must be equipped to follow-up with fraud transactions and compromised card analysis in order to perform a more targeted, efficient re-issuance and fraud mitigation process. Protecting your customers from fraud is an important part of the customer service experience for FIs.

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Financial Regulators Encourage Leniency

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Five federal financial institutions regulators and state regulators have released the following for financial institutions, encouraging them to work with consumers affected by the federal government shutdown.

"While the effects of the federal government shutdown on individuals should be temporary, affected borrowers may face a temporary hardship in making payments on debts such as mortgages, student loans, car loans, business loans, or credit cards. As they have in prior shutdowns, the agencies encourage financial institutions to consider prudent efforts to modify terms on existing loans or extend new credit to help affected borrowers.

Prudent workout arrangements that are consistent with safe-and-sound lending practices are generally in the long-term best interest of the financial institution, the borrower, and the economy. Such efforts should not be subject to examiner criticism. Consumers affected by the government shutdown are encouraged to contact their lenders immediately should they encounter financial strain."