Phone scams continue to become more sophisticated. When caller ID was introduced, it became easier for people to avoid unwanted calls, but it was only a matter of time until scam artists developed ways to use caller ID to entice people to pick up the phone. Scammers can mimic your bank or your credit card company or even a government agency like the IRS.
Know what to look for
In the United States, people of all ages and financial backgrounds receive fake phone calls from scammers pretending to represent their banks or credit card companies in order to convince consumers to provide personal information to access accounts or simply send payment.
For example: Victims receive calls from toll-free numbers telling them that holds have been placed on their credit or debit card account(s). Then the callers instruct victims to press “1” and enter their credit card numbers to release the hold. Unsuspecting consumers who follow these instructions give away their credit card numbers, which fraudsters can immediately use to make online purchases or create fake cards for future use.
Don’t Be Afraid to Hang Up: Credit card companies will never ask consumers to give their information the way described above. If you receive such a call and are concerned about your credit card account, HANG UP and call the number on the back of your card instead.
Another reported scam involves prepaid money cards. Here, the perpetrator pretends to be an agent of the power or phone company, making a courtesy call for an overdue balance. Then the bogus agent claims that the company’s credit card machine is out-of-order and requests the victim to pay the bill using a reloadable prepaid card. Similar scams have been reported using PayPal accounts.
What the IRS would say vs. a scammer
The IRS continues to hear from taxpayers who have received unsolicited calls from individuals demanding payment while fraudulently claiming to be from the IRS.
Based on the 90,000 complaints that Treasury Inspector General for Tax Administration (TIGTA) has received through its telephone hotline to-date, TIGTA has identified approximately 1,100 victims who have lost an estimated $5 million from these scams.
Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment. This is not how the IRS operates. People should hang up immediately and contact TIGTA or the IRS.”
It’s important for taxpayers to know that the IRS:
- Never asks for credit card, debit card, or prepaid card information over the telephone;
- Never insists that taxpayers use a specific payment method to pay tax obligations; and
- Never requests immediate payment over the telephone and doesn’t take enforcement action immediately following a phone conversation. Taxpayers usually receive prior notification of IRS enforcement action involving IRS tax liens or levies.
Potential phone scam victims may be told that they owe money that must be paid immediately to the IRS or they’re entitled to big refunds. When unsuccessful the first time, phone scammers sometimes call back trying new strategies.
Fraudsters have convincing methods of persuading people that they’re legitimate IRS agents, including:
- Using fake names (often common names and surnames) and IRS badge numbers;
- Reciting the last four digits of a victim’s Social Security number;
- Spoofing the IRS toll-free number on caller ID to make it appear that it’s the IRS calling;
- Sending bogus IRS e-mails to victims to support their bogus calls; and
- Following up with bogus calls from someone pretending to be the local police or DMV to support threats of jail time or driver’s license revocation.
Victims may even hear background noise that mimics a call site. If you get a phone call from someone claiming to be from the IRS, here’s what you should do:
- If you know you owe taxes or you think you might, call the IRS at 1-800-829-1040. IRS employees at that line can help you with a payment issue, if there really is one.
- If you know you don’t owe taxes or have no reason to think that you do (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to TIGTA at 1-800-366-4484.
- If you’ve been targeted by an IRS-related scam, you can also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add “IRS Telephone Scam” to the comments of your complaint.
Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.
The IRS encourages taxpayers to be vigilant against phone and e-mail scams that use the tax agency as a lure. The IRS doesn’t initiate contact with taxpayers by e-mail to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS also doesn’t ask for your personal identification number, password, or similar confidential access information for credit card, bank, or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the e-mail to .
For more information on this topic review my other blog post: “3 Tips to Avoid New Phone Scams”