Prepaid Cards, Wire Transfers and Threats: The Latest Tax Scam

If someone claiming to be an IRS agent calls you, tells you that you owe taxes and then asks you to load the amount you owe onto a prepaid card (or send it via a wire transfer), know this: It’s a trap — and part of a growing scam that’s costing victims thousands.

The IRS telephone  scam isn’t new – the IRS has been issuing warnings on it since last year. But it’s been revving up throughout this year’s tax season, and both the volume and sophistication are troubling. In fact, the IRS called it the “largest scam of its kind that we have ever seen” in a press release issued yesterday. More than 20,000 victims have been contacted, and those who fell for the scam have collectively given thieves more than $1 million.IRS phone scam

How it works
You (the  victim) get a call from someone claiming to be from the IRS. The thieves have been manipulating caller ID information to make it look like it’s the IRS calling. To lure you in, the scammers reveal all the personal information they know: the last four digits of your Social Security number, your home address and your employer. Sometimes, a convincing email with IRS logos will follow.

Then come the threats: an accusation that you’ve been hiding income from the IRS, and a frightening dollar amount that you supposedly owe. The thief will then toss in threats of arrest, seizure of property and freezing of bank accounts.

Once you’re good and scared, the scammer will propose a comparatively simple solution: Just pay up! When? Immediately, of course. In a column about her experience with the scam, Forbes writer Halah Touryalai says the fraudster who called her gave her an hour. Scammers provide victims with a variety of simple ways to hand over their money. They can wire it, deliver a check to a supposed local IRS office (Touryalai’s scammer gave her that option) or load money onto a prepaid card. Prepaid cards have been in phone scammers’ toolboxes for a while now – consumer advocates started warning consumers in 2012 that the cards are being utilized as conduits of fraud. A thief will ask the victim to load money onto the card and hand over the card information so that the thieves can siphon off the funds before disappearing.

How to protect yourself
If you get a threatening call (or an email) from a supposed IRS agent, do the following:

  • Know that the IRS usually contacts people about unpaid taxes by mail – not by phone, not by email. So a phone call or email should make you automatically suspicious. The IRS also won’t ask for payment via a wire transfer or prepaid card, ask you to pay up immediately or use threatening language.
  • If you suspect that you might actually owe taxes, hang up and call the IRS at 800-829-1040 and conduct your business with them directly.
  • Report the incident and file a complaint with the Treasury Inspector General for Taxpayer Administration (800-366-4484) and with the Federal Trade Commission at FTC.gov, using the words “IRS Telephone Scam” in your complaint.
 
Comments
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

No comments yet.