Watch Out! Tax and Credit Card Scammers Love This Time of Year!

This time of year when online ordering is heavy and folks are gearing up to file their taxes, is the time to really be aware of scams. Once again, Danielle Kane, the Tri-Cities Market Manager with the BBB, is sharing an important press release that could save you from being a victim of fraud and losing your hard earned money:

December 4, 2018

Tri Cities, WA

It’s National Tax Security Awareness Week. Better Business Bureau Northwest + Pacific has some suggestions for consumers and business owners for keeping their tax information secure and avoiding tax-related scams.

Last year, BBB processed approximately 2,400 complaints (nationally) against tax return preparation services and related businesses (including accountants). For those complaints, the median disputed amount for which consumers sought BBB’s help was $500.

Tax-related scams are even more prevalent. In 2017, BBB received approximately 3,500 reports to BBB Scam Tracker from consumers reporting con artists claiming to be with the IRS. This is a very common type of imposter scam.

This scam tends to rely on tactics such as intimidation (such as threats of arrest), isolation (to keep victims from talking to their family members about the supposed tax issue), and/or pressure to act/pay quickly.

The IRS also noted in their recent press release that they’ve seen a massive increase in phishing scams, citing a 60 percent increase since last year. These schemes can endanger a taxpayer’s financial and tax data, allowing identity thieves a chance to try stealing a tax refund. The emails often contained “IRS Important Notice” or “IRS Taxpayer Notice” in the subject line to appear legitimate, but were not coming from the IRS.

BBB has been cooperating with the IRS by providing the agency with phone numbers reported from consumers to BBB Scam Tracker. Any regional or local law enforcement agency can request additional information from Scam Tracker, as well.

However, the news isn’t all bad. The IRS reported a steep decline year over year in successful tax-related identity theft cases. This is the second year in a row that ID theft has decreased.

With the holiday season upon us, BBB is warning consumers to be especially vigilant, as this is an important season for scammers, too, looking to take advantage of all of the online orders being placed, information being shared and credit cards being used.

Here are some key ways consumers and business owners can combat tax fraud: 

·     Protect personally identifiable information (PII) such as birth date, Social Security numbers, bank accounts, tax-related information and financial records.

o     This speaks to our tips on cybersecurity and the importance of maintaining strong passwords, updated software, verifying the source of emails and using two-factor authentication where possible.

o     Know that accountants and tax professionals have a legal duty to have sound cybersecurity protocols in place and must meet certain data security requirements in regards to client information.

·     Understand how tax scams work and be on guard for “red flags” such as calls or emails from the IRS, especially those that demand immediate payment, include threats or intimidation, or ask for payment requests via wire transfer, prepaid debit card, or gift card.

o      The IRS only contacts consumers via postal mail.

Check out BBB Scam Tips for more information: BBB.org/TaxScams.

For more information from the IRS and to see in detail all of the efforts around tax security for consumers and business owners, click here: https://www.irs.gov/newsroom/security-summit