Phone Scam: IRS Imposter
Your phone is ringing. The caller ID shows a Washington, D.C. area code. You answer the call. The person on the other line states they are calling from the IRS and rattles off a badge number.
As you nervously question yourself about why you would receive a call from the IRS, several scenarios flash through your mind. The person on the other end of the line confirms the worst of them.
They claim that you owe back taxes. If you pay them right away, there will not be any penalties. However, if you do not, a warrant will be issued for your arrest. You are confused because, to your knowledge, your taxes are up to date.
Yet, the person on the other end of the line knows the last four digits of your social security number. Also, the caller ID appears as if it could be the IRS. This must be legitimate, right?
Wrong! If you receive a call like this, or unfortunately have fallen victim to this scheme, you are not alone. This is called an IRS Imposter Scam, a form of vishing, one of the most commonly reported types of fraud.
Examples of an IRS Imposter Scam
As listed in the above scenario, this scheme is perpetrated by the fraudster purporting to be from the IRS. The IRS is a governmental agency responsible for collecting federal taxes.
These fraudsters call unwitting victims and tell them that they owe back taxes. Sometimes they might claim that you owe funds for another purpose, such as federal student taxes that do not actually exist.
These scammers can be extremely convincing. They use high-pressure scare tactics with the goal of getting their victims to send them the money as quickly as possible.
They don’t want to allow their victims time to think things through and realize they are being tricked. These fraudsters might tell you that you will be arrested, face a lawsuit, or that your license will be revoked if you do not immediately pay.
They might already have some personal information of yours, such as sections of your social security number obtained from data breaches, to make themselves appear legitimate.
The FTC reports that nearly 1 in 5 people lose money in these scams. Younger people are more likely to fall victim, but older people suffer higher median losses.
Red Flags to Watch For
It can be tricky to tell legitimate correspondence from fraud. Here are a few red flags to be on the lookout for:
- Funds are requested through email, text, or telephone call. The IRS always first contacts individuals about tax payments through the mail. Fake forms that are sent in the mail will sometimes ask people to make checks payable to the IRS. Legitimate correspondence will list to pay the United States Treasury.
- Payment is demanded immediately. Threats, such as arrest, are made if you refuse immediate payment.
- You are asked to put money on a prepaid debit card or pay through a wire transfer. These payment methods can be harder to trace or retrieve funds from, so they are a preferred method for fraudsters.
The FTC lists these handy tips on how to identify and beat government imposter scams.
Tips to Protect Your Personal Information
With this type of fraud being so prevalent, how can you protect your information? Follow these guidelines:
- Never give out personal information to unsolicited callers. Always hang up and call back at a number obtained separately, such as from the company website. Do not go to this website from any links provided in the questionable communication.
- Don’t trust caller ID. These numbers can be spoofed using easily obtainable mobile apps.
- If you have questions about your tax status, contact the IRS directly at 800-829-1040 or go to their website. Remember that the IRS will first contact you through postal mail.
- Put your telephone number on the Do Not Call Registry. While this will not eliminate fraudulent callers, it can help you determine what is legitimate.
- Don’t send money through wire transfers or prepaid gift cards.
What to Do If You Become a Victim
Unfortunately, there will be circumstances in which people unwittingly give out their financial information, or at worst, send fraudsters money. If this occurs to you, do the following:
- Save the details – Write down the number that you were called from, as well as the name and badge number given.
- Report the call – You can file a complaint with the FTC online or call 877-FTC-HELP. File a complaint with the TIGTA online or call 800-366-4484.
- Contact your financial institution – If you have already sent the funds, they may be able to attempt to retrieve them. Don’t count on this, though. Fraudsters like to use payment methods in which the funds are hard to recover. However, reporting scams can also help your institution protect your account in the future, remain aware of current fraud trends, and protect other people from becoming victims.
- Sign up for identity protection – There are many providers for this service. Some financial services, such as credit card companies, even provide this at no additional cost.
The most important thing to remember when protecting yourself from fraud is to never give out your personal information when contacted unexpectedly – no matter the method.
For questions about keeping your account safe, 121FCU offers free financial counseling. Call and speak with one of our knowledgeable representatives today!
