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FTC and BBB warn about tax scams

Red alert! The Federal Trade Commission AND Better Business Bureau are both warning consumers about tax scams.

Tax scams are essentially identity theft. Someone, using your Social Security number, files a tax return in your name—pocketing your refund.  You may have no idea it has happened until it’s too late. You could get a letter from the IRS saying more than one tax refund has been filed in your name, or the IRS may show you have earned income from an employer you never worked for.

Now that everyone has their tax documents in hand and are ready to file, scammers are working overtime in an effort to steal Social Security numbers.

How the Scam Works

This FTC video breaks it down:

Briefly, you get a call, text or email from someone alleging to be from the Social Security Administration (SSA) or another government entity. The name on your caller ID may even make it appear this is true. The scammer contacting you says your Social Security number (SSN) has been used to fraudulently apply for a credit card or commit another crime. In order to fix the situation, the scammer says you must confirm your SSN and other personal information. If you don’t cooperate, you’ll be threatened with legal action or having your Social Security number blocked or revoked.

Even though the details of the scam may vary, the story you hear is designed to scare you. Scammers hope that under pressure you will tell them your SSN and other sensitive personal information they can use to file a tax refund in your name.

How to Avoid the Scam

The FTC recommends:

  • Filing your return early to beat scammers.
  • Use a secure internet connection if you file electronically (no coffee shops for you!), or mail your tax return from the post office (not from your personal mailbox).

The BBB recommends:

  • Never giving personal information to unsolicited callers. If someone contacts you without your permission, refuse to tell them any personal information.
  • Remember, the SSA will never call you asking for your Social Security number. They will never ask you to pay anything, nor will they threaten your benefits.
  • Don’t trust your caller ID. The internet has made it possible for scammers to use fake IDs when they call your home. If you receive a suspicious call, don’t make any important decisions based on what your caller ID says.
  • Contact the Social Security Administration: If you are concerned about a call you received from someone who claims to be with the SSA, you can call the real SSA at 1-800-772-1213 (TTY 1-800-325-0778).

For More Information

For more information what to do if you think you’ve fallen victim to a scam, visit the FTC tax-related identity theft site.

To learn more about other kinds of scams, go to BBB.org/ScamTips.

 

Photo courtesy of Flickr user: Pictures of Money.

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