The IRS Is Using Private Debt Collectors Who Will Make Calls, but This Actually Changes Nothing

Sometimes fraud prevention can be boiled down to nice, simple rules that don’t leave much room for subtlety. Never wire money to a stranger. Just keeping that one rule in mind will keep you out of a lot of trouble, even if you forget the details of the scams that utilize the technique.

The IRS will never call you was another one of those hard rules, but as of 2017, it’s become a little more complicated. However, for the most part, nothing has really changed when it comes to fraud prevention.

Basically, the IRS will be contracting with four collection agencies, who will only be contacting certain taxpayers who have been delinquent for a significant period of time, whom the IRS has been unable to locate, and who meet certain other criteria. Furthermore, the collectors will not be demanding payments. Instead, they will be directing taxpayers toward electronic options for paying the IRS directly.

This means that some people will be getting calls from collection agencies on behalf of the IRS. The rest of the fraud prevention rules still apply: if they threaten you with incarceration or demand immediate payment, it’s a scam. If they’re talking about wiring money or loading up gift cards, it’s a scam.

Since con artists are nothing if not adaptable, I’ll add this point: if they do anything other than tell you about how you can pay the IRS directly on your own, it’s a scam. I’m sure someone is already gearing up to make calls claiming to be a collection agency, then telling victims they can pay over the phone with a credit card, with a wire transfer or with prepaid gift cards, or by visiting a fraudulent website. The collection agencies the IRS is using will not be asking for nor accepting payments from delinquent taxpayers. At all.

The actual website where you can pay your taxes, overdue or otherwise, is IRS.gov/Pay. And that’s pretty much the only thing the collection agencies contracted by the IRS are going to be allowed to tell you. Any mention of a different website to pay your taxes? Scam.

I recommend reading the full article below for more detailed information.

Don’t Fall for the Inevitable Western Union Settlement Scams (OR: Distant Early Warning)

In January of this year, Western Union reached a $586 million settlement with the FTC to refund some of the money people lost to scams between January 2004 and January 2017, and to create a functional fraud prevention program.

Consumers who can prove they were a victim of a scam that involved wiring money through Western Union between those dates, and who can back up their claims with documentation, may be able to get some money back. Not all of it, but some, which is better than none. The refunds will be handled through the Department of Justice, once they have the money from Western Union. It may take a year or so to verify and pay out claims after that.

So here’s your preemptive scam warning: don’t fall for the inevitable scams based on this settlement. At some point, somebody is going to start attempting to trick people into sending money in advance to claim their share of the settlement.

There will be a claims process through the DOJ. There will not be any prepayments made on your part, you will not be able to “speed up the process” by sending money, and the DOJ or FTC won’t ask you to purchase any gift cards (the preferred method of fraudulent payment these days, now that Western Union has taken enough of a hit to actually start paying attention to the problem). Nobody will contact you out of the blue by phone, email, or any other channel (I predict well-organized scammers who kept their victims’ contact information going after the people they already tricked once). You will submit a claim through the DOJ, wait a long time, and hope for the best.

In the meantime, if you were a victim of a scam that involved Western Union, keep any documentation you have from the incident. How much you can get back will depend on how much you lost and how many people file a claim, but getting something back is better than the nothing you were left with before.

Sources:

Scam Calls from Local Phone Numbers (OR: Let It Be, Let It Be)

A few years ago I wrote about lottery scams originating from Jamaica, and I basically said, “Don’t even answer a call from the 876 area code.”

Which is still decent advice, although area codes will begin to have less and less geographical meaning as time goes on because we’re running out of numbers; new phone lines will be assigned whatever ten-digit string is available at the moment, and the old idea of “area code” = “whence the call originates” will begin to blur.

That said, not answering calls from unknown numbers? Still a good rule of thumb. If it’s legitimate and important, they’ll leave a message.

But what if the call almost looks familiar? For example: your phone number is 219-555-1234, and a call shows up from 219-555-5678? Even with all that stuff about area codes and running out of phone numbers, the same area code AND prefix is bound to be someone local, right?

Not in the age of caller ID spoofing.

A favorite new tactic among scammers is to pick an area code, a prefix, and a random set of four numbers, then robocall everyone within that area code and prefix. The call looks local, and potential victims will be more likely to pick up, thinking someone they know is calling.

Treat it like any other unknown caller and consider not answering it. Once again, if it’s legitimate and important, they’ll leave a message.

I remember when screening calls was sort of…frowned upon. Like you were arrogant, paranoid or trying to weasel out of paying your debts. But call screening is just good personal business these days. Screen away!

Now, eventually this is going to happen: the spoofed caller ID is going to appear to come from a number you do recognize. There is a non-zero chance it will happen someday, and in this case, you’ll probably pick up. End the call without explanation as soon as you realize it’s a scam call. (If you can’t tell the difference, get new friends.)

There is a second step to dealing with the same area code/same prefix scam calls: after you’ve ignored the ringing phone and found that they either left no message or a prerecorded pitch on your voicemail, do NOT call the number back to ask about the call or to accuse someone of running a scam.

Think about it: caller ID spoofing means the call did NOT come from the number that shows up on your phone. That means the actual owner of that number did NOT call you. You’re going to end up reaching a victim whose phone number was chosen at random by criminals, and if you start it on them you’re just causing stress to another person who doesn’t deserve it.

Don’t do that. It’s not nice. You avoided a scam by screening your calls. That’s enough of a victory. Let it be.

Police Impersonation Scam (OR: You Can’t Post Bail with Gift Cards)

Here’s a scenario based on a recent article I read:

  1. The telephone rings. The caller ID displays a 204 area code. You answer it.
  2. The caller introduces himself as Officer Scott Davidson from the Brooke Police Department.
  3. The caller claims that a relative has been arrested and needs $2,000 to post bail.
  4. The caller instructs you to purchase gift cards and relay the numbers to him over the phone.

At what point would you begin to think, “Something’s weird about this?”

If you’ve memorized every area code in the world for some reason, or happen to have some weirdly specific purpose for recognizing the 204 area code (it’s in Canada), that might have been enough. But that’s probably not most people.

If you’ve heard of the Grandparent Scam, you might recognize the pattern: an alleged police officer calling to request money to bail out a relative.

The point at which the call really goes off the reality rails, however, is when the caller tells you to buy gift cards and relay the numbers. Remember this (repeat it out loud, write it on all your telephones in Sharpie marker, whatever you need to do): you can’t post bail with gift cards.

Also: police don’t call demanding payment over the phone.

Also also: never trust a stranger asking you to buy gift cards and relay the numbers, or wire money.

Source: Police: Phone scam involves officer impersonator

The ‘Can You Hear Me?’ Scam (Or Maybe Not)

I’ve seen a few recent warnings about something many are referring to as the “Can You Hear Me?” Scam. Basically, someone will call, ask if you can hear them, wait for you to say “yes,” then hang up. Later, they make unauthorized charges to your credit card, and use the recording of you saying “yes” in court to “prove” you agreed to the charges.

Now, any reminder to NOT talk to strangers who call you on the phone or to engage with robocalls in any way is a good reminder, but if you’re like me, you might find a few holes in this specific warning.

For example, unless you have the weirdest credit card in the world and its number is “YES” for some reason, simply saying the word doesn’t automatically give the caller your card information. Despite the existence of Peanut Butter M&M’s, Gus’s World Famous Fried Chicken and the first Doc Watson album, magic isn’t actually real, and nobody can pull your credit card number out of your wallet simply by getting you to say “yes” one time. The scammer would have to already have this information before calling you.

Then, if they’ve already got your card information, why would they bother calling to trick you into appearing to agree to charges? In a vast majority of the cases I’ve seen, scammers aren’t interested in making their schemes complicated. They’re not going to use a recording of you saying “yes” in court because they’re never going to end up in court. If they have your card information, they’re just going to use it. They don’t need to track down a phone number associated with the card in order to get a “yes” they’re never going to need.

So this leaves us with…what, exactly? Is this a real scam? There do not appear to be any documented cases of “said yes/card was charged/disputed the charge/recording ‘proved’ I authorized the charge/no recourse.” But the calls appear to be actually happening, and you have to wonder: what are they up to?

It doesn’t matter. If you get a call and someone just says, “Can you hear me?” hang up. No matter what their intent, it’s not something you want to get involved in.

Even better, stop answering the phone every time it rings. Almost every phone scammer needs you to pick up the phone. If you don’t, you’ve already ruined their scheme. If you recognize a number, go ahead and pick it up, but let everyone else leave a message.

This may be just one of those stories that gets passed around on a better safe than sorry basis, but I like accuracy, and the story being shared by various online sources doesn’t add up. If you do get a call like this, just hang up. But consider letting all unfamiliar calls go to voicemail. It’s the safest method.

Sources:

  1. The Consumerist: If A Telemarketer Or Robocall Asks “Can You Hear Me?” Just Hang Up; It’s A Scam
  2. Snopes: ‘Can You Hear Me?’ Scam Warning

Counterfeit Check Scam Targets College Students (or: Stop Me If You Think You’ve Heard This One Before)

College students have been targeted by an employment scam that’s going to start sounding familiar as soon as I begin to describe it.

Ads are placed on job websites for administrative positions, or emails are sent directly to students “recruiting” them for the jobs. You know…college…recruiters…there companies who need your talents so badly, they’re hiring these people called recruiters to find you before you find them. That’s the dream, right?

Anyway, students who respond to the ads are sent a cashier’s check…can you guess what’s coming yet? The victim is instructed to cash the check, then wire the funds to someone, presumably to pay for equipment or software.

Now let’s see if you can guess what happens next:

  1. The student receives equipment and software and begins a rewarding career that pays well;
  2. The student gets struck by lightning three times in one week;
  3. The student finds out the check was counterfeit, and since he already wired the money to someone else, is now out several thousand dollars.

The answer is C, but B is actually more likely than A.

Scams usually involve tricking a victim into willingly handing something over, be it money or personal information. Scammers try to invoke emotional responses in order to make potential victims bypass their logic. This is why scammers try to create urgency or incite fear, prey on those who are desperate, or (in this case) prey on a group of people, college students, who know they’re in a competitive scene where the supply is greater than the demand.

Scams like this are easy to avoid, simply by applying a single principle: never cash a check and then wire the funds to someone else. It’s one of those rules that works in dozens of scenarios.

Source: https://www.ic3.gov/media/2017/170118.aspx

So wait, DOES the IRS ever call you?

One of my favorite mantras has long been, “If they’re calling you on the phone, it’s not the IRS.”

That’s because so many scammers use spoofed caller ID information to impersonate the agency to trick victims into wiring money or purchasing gift cards. The IRS uses letters when they need to talk to you.

Then I ran across this article from last year: IRS does sometimes call taxpayers.

Okay.

But, if you actually read the article (and please, always read the article and not just the headline), two things become clear. First, it seems the (very rare) phone calls were happening because agents were using old procedures that predate IRS impersonation scams, and the IRS is working to eliminate these types of first-contact calls.

Secondly, and most importantly, none of the calls were about the taxpayer owing money that needed to be paid immediately via wire transfer or gift card. The legitimate calls were made solely to schedule appointments to discuss an audit. No personal information was requested, no threats of arrest were made, no payments were demanded.

Now, just because they say they’re going to stop calling people (at least as a first contact) doesn’t mean change will be immediate. In a large organization, new procedures can be slow to implement. There may be an isolated incident here and there where an actual IRS agent calls a taxpayer about scheduling a meeting before a letter is sent. So I’ll amend the old mantra: “If they’re calling you on the phone and demanding money, it’s not the IRS.”

That should cover all the bases for now.

An uncommonly convoluted con

They say brevity is the soul of wit, but it’s apparently not the soul of spam. I received this in my inbox not too long ago:

From: IMF ADMIN <admin@imfpaymentcenter.com>
Subject: May Good Decision

INTERNATIONAL MONETARY FUND (IMF)
DEPT: WORLD DEBT RECONCILIATION AGENCIES.
ADVISE: YOUR OUTSTANDING PAYMENT NOTIFICATION

Attention Wing Chan

A power of attorney was forwarded to our office this morning by two gentle men, one of them is an American national and he is MR DAVID DEANE by name while the other person is MR… JACK MORGAN by name a CANADIAN national.

This gentlemen claimed to be your representative, and this power of attorney stated that you are dead, they brought an account to replace your information in other to claim your fund of $12.5 Million Usd which is now lying DORMANT and UNCLAIMED, below is the new account they have submitted:

BANK.-HSBC CANADA
Vancouver, CANADA
ACCOUNT NO. 2984-0008-66

Be further informed that this power of attorney also stated that you suffered and died of throat cancer. You are therefore given 24hrs to confirm the truth in this information, If you are still alive, You are to contact us back immediately, Because we work 24 hrs just to ensure that we monitor all the activities going on in regards to the transfer of beneficiaries inheritance and contract payment.

You are to call this office +44(0)7778022499 immediately for clarifications on this matter as we shall be available 24 hrs to speak with you and give you the necessary guidelines on how to ensure that your payment is wired to you immediately.

I have attached a copy of the last part payment of $500,000.00 which was paid into your provided account last week, please check is this is the same account submitted by this two men who claimed to be your representative. Reply this email to [redacted]

Kindly reply

Rev. David Churchman
International Monetary Funds Agents

I get what they’re trying to do here. The victim is supposed to think they got a message intended for someone else (“Wing Chan”) who has a whole lot of money tied up in some account, but they think Wing Chan is dead and would he please confirm that? I assume that the victim is supposed to decide to commit a little fraud himself and reply, “No, I’m Wing Chan and I’m totally alive so give me all that money now please,” followed by the usual, “But wait…you have to wire us a bunch of money first.”

But what a twisty, turny, tricksy route they take to get there. It’s a real adventure, what with the two “gentle men,” the throat cancer and the involvement of the International Monetary Fund.

Here’s the thing about the IMF: I’m fairly certain they don’t handle individual estate accounts for anyone living or dead or allegedly dead. They don’t mention it on their own website.  They deal with financial situations in and between nations. $12.5 million is a lot of money to most individual people. To the IMF, it’s like a nickel dropped down a storm drain. They’re not going to get involved.

So yes, this is an obvious example of spam. I wanted to show it to you, though, because it’s kind of weird. As always, “do this to claim your free money” is forever a scam and always has been.

Tell Your Parents: seniors lose $36 billion every year to financial fraud

image-criminal-fraud-01Jerry Seinfeld used to do a great bit about aging. The not-very-funny paraphrased version for our purposes today is that, when people get older, everything gets smaller—the meals, the houses, their bodies. Everything except the car, which just get bigger.

But there’s another thing that gets bigger as we get older, too: the target painted on our backs. The elderly lose an estimated $36.4 billion every year to fraud. That’s the size of entire sectors of the U.S. economy.

CNBC ran a story on the subject recently, and it’s worth a read. The important thing is to stay involved in your parents’ lives and talk to them about the realities of financial fraud and the fact that they will be seen as marks simply because of their age.

Greasy telemarketers, lottery scams, the old “grandchild in danger” telephone scam, get-rich-quick schemes (Iraqi dinar and Vietnamese dong currency peddlers, I’m looking at you), phony investments and affinity fraud (where the scammer uses affiliation with a church or other organization to appear trustworthy)—all of these target the elderly. It’s important to talk to your older family members and friends about the dangers, and take action where needed.

Additional resources are listed below:

If you’ve let your antivirus subscription lapse, renew it today

There are basically two options available for safe use of the Internet:

  1. Get antivirus software, keep it updated, and scan your computer regularly;
  2. Don’t go online, for any reason, ever, forever.

We are well past the old days where getting a computer virus was mostly just irritating. Malware is big business for organized crime, and your computer can be locked up forever unless you pay (ransomware) or infected with programs designed to steal banking credentials.

You can lose a lot of money, in other words.

There’s a new threat called GozNym. I’m still researching it so I can tell you more, but so far the details I’ve found are hazy. It’s referred to as “Trojan horse” malware in some of the articles I’ve read. That usually means the victim opens a file they think is something else and gets infected, but that’s about all I know at this point. I can tell you this: GozNym targets financial accounts. GozNym is bad. You don’t want it. [smash cut to Elaine Benes from Seinfeld shouting “I know I don’t want it! I don’t need you to tell me what I don’t want, you stupid hipster doofus!” at Kramer]

And I can also tell you this: if you get an email with a file attached, be extremely careful about opening or running that file. Is it from someone you know? Is it something you asked for? Are you being led to believe it’s from the FBI or a local police department, or is it a “shipping confirmation” from an online retailer? Slow down. Think before you click anything.

I can also tell you not to download anything just because a website is asking you to download it. And even if you did go searching for files or software to download, make sure you know what you’re getting before you download or run anything. And scan it for viruses before you run it.

But you also have to have some form of antivirus software on your computer. It won’t be perfect. It won’t protect you from 100% of malware 100% of the time. Sometimes a new threat can’t be detected yet, and careless behavior on your part can almost always defeat even the best antivirus programs. And they usually cost money.

But they’re vital. That yearly subscription cost isn’t just a racket. Sure, it hurts to shell out $30 or $50 or more, but some things hurt even worse, like losing five years of digital photos or having a business’s checking account cleaned out.

Stay vigilant.