It's Tax Season - Watch Out for These Scams
As we get further into tax season, ‘tis the season for financial scammers to work in earnest! Financial scams have become much more sophisticated over the past few years – gone are the days of the Nigerian prince spam email. As a result, we want to reach out with details of common scam attempts, so that you can feel confident as you go about your daily life.
We urge you to mention these scams to family and friends, especially those who may be particularly at risk: those who aren’t very tech-savvy, those who are new to filing taxes, new Social Security benefit recipients, and future homebuyers. You can even send this link to them if you’d like.
The IRS/SSA is probably not calling you.
IRS scams have been prevalent for years, and we continue to remind clients: the IRS will never, ever call you to demand immediate payment. In fact, they will rarely call you at all! Common scams urge victims to buy gift cards, claim to be able to revoke driver’s licenses, or even threaten to involve law enforcement. These are so prevalent that the IRS has many web pages on how to know if contact is real or a scam, but they have been growing more sophisticated over time.
In general, the IRS will always send you a letter first if they disagree with your tax return or intend to audit you. You can confirm this letter is real by calling the IRS – not at the number provided on the letter, which may link to a real-sounding call center run by the scammers, but by calling the official number listed at IRS.gov.
A relatively new scam making the rounds involves someone from the Social Security Administration saying that your SSN has been “suspended” or “revoked” and can only be fixed with an immediate payment. This targets older Americans who may have less intuitive familiarity with what “sounds” like a scam and are more reliant on their Social Security benefits. As before, Social Security will always start by mailing you a letter – and you can make sure that’s real by calling the official number at SSA.gov.
When in doubt, call them back.
You may have experienced “spoofed” phone calls over the past few years, where phone numbers very close to yours call you but turn out to be robocalls. It has become very easy to change your Caller ID, to the point where the only way to be sure you are really speaking with a bank, credit card company, or even your financial advisor may be to call them back.
This Caller ID mimicry can be used in all sorts of ways. A common scam is for you to receive a call from your bank’s “consumer protection department” asking if you have made recent charges. When you tell the caller that you did not make those purchases, they will ask you to read off a text message code to verify your identity so they can send you a new card. However, they already know it’s you, because they called you! What is actually happening is, scammers are on the “reset password” section of your bank website and will use the authentication code to log in and send money to themselves, oftentimes via an instant cash app like Zelle that can’t be reversed.
This is a good rule of thumb: the person making the call knows exactly who they are calling. The person being called needs to authenticate the person calling, so they are the ones who can send a verification code. If you call your bank, they will send you a code. If your bank calls you, they already know it's you! They don't need one.
Any financial professional should be very comfortable with you saying, “I’m sorry, I need to make sure you are really from my bank. I need to hang up and call my local branch/the number on the back of my debit card, so can I get your name or extension to get transferred back to you?”
Emails have become harder and harder to trust.
It used to be easy to tell when a friend’s email address got hacked, because you’d get a message in broken English that definitely wasn’t from your friend John. Newer scammers will actually read sent and received messages, and will imitate the writing style of the person whose email they’ve stolen. They may even ask, “how was your vacation to Hawaii?” before requesting money or sensitive information.
This is why we always insist on speaking with you on the phone before we move funds into or out of your accounts. We have had multiple experiences with client hacking that were thwarted because we called to confirm a transaction and the client had no idea what we were talking about.
Another sophisticated scam attempt will mimic those notification emails you may get from your bank or credit card company, telling you your statement is available and you can click a button to view it online. However, the button will take you to a website that looks like your bank’s website, only with a slightly different web address. Always make sure to check the long URL in the top of the page, and when in doubt, open a new tab and go to your bank’s website from scratch!
Homebuyers are particularly vulnerable to scams.
Lastly, in the past we have communicated regarding highly effective and financially devastating down payment schemes. Buying a home is something that happens so rarely in your life that it’s much harder to identify something out of the ordinary. Here’s how the scam works: you get an email from your title company with wire instructions for your down payment, but a few days later they call to say they never received the funds. Scammers are targeting mortgage brokers and title companies, and the false wire instructions they send may even come from your broker’s email address! Once that money is gone, it is incredibly hard to get back.
Whenever you are wiring money, always be sure to independently look up your title company and call them directly to verify all the wiring instructions before you proceed. We do this for all our clients who are closing on a house, but it is so prevalent and so hard to reverse that we ask you to mention it to friends and family who will be buying a home soon.
These are just some of the many scams we are familiar with. Remember, scammers thrive because they make their victims think they have to act immediately. In reality, only very rarely is there a financial emergency that won’t allow you time to take a breath and do a quick search for more information before you deal with it.
Please feel free to forward this email to anyone who may be at risk – they may already know this information, but we’d rather be safe than sorry! If you find yourself in a similar situation, you can reach out to our office and we can help you figure out if something is legitimate. I wish you good luck with your tax filing, and a wonderful start to spring.