Beware Stimulus and Tax Scams

It’s stimulus season and tax season at once, and scammers couldn’t be happier. They know that taxpayers are eager to get their hands on their stimulus payments and tax refunds. As consumers are working to file their taxes before the May 17 deadline, all that paperwork and payments mean people may be letting their guard down. For a scammer, nothing could be better!

The IRS is warning of a surge in scams as the tax agency continues processing tax returns and distributing stimulus payments to eligible adults who have not yet received them. Here’s all you need to know about the latest round of stimulus and tax scams:

How the scams play out

In the most recent IRS-related scams, scammers will con victims into filing phony tax returns, steal tax refunds or stimulus payments or impersonate the IRS to get victims to sign documents or share personal information, such as Social Security numbers or checking account numbers. The scams are pulled off via email, text message or phone. Sometimes, victims will be directed to another (bogus) website where their device will be infected with malware. Other times, the victim receives a 1099-G tax form for unemployment benefits they never claimed or received, because someone has filed for unemployment under their name. Unfortunately, the losses incurred through most of these scams can be difficult or impossible to recover.

What you need to know

As always, information is your best protection against these scams. Here’s what you need to know about the IRS, the stimulus payments and tax returns:

The IRS will never initiate contact by phone or email. If there is an issue with your taxes or stimulus payment, the agency will first communicate via mail.
There is no “processing fee” you need to pay before you can receive your stimulus payment or tax refund.
The IRS is not sending out text messages about the stimulus payments. If you receive a text message claiming you have a pending stimulus payment, it’s from a scammer.

There is no need to take any action to receive your stimulus payment. Likewise, aside from filing your tax return, there is nothing additional you need to do to receive your tax refund.

If you’ve been targeted

If you receive a suspicious phone call, text message or email that has allegedly been sent by the IRS, do not engage with the scammer. Block the number on your phone and mark the email as spam.

If you are a victim

If you are the victim of identity theft related to taxes or stimulus payments, there are steps you can take to mitigate the loss.

If you received a 1099-G for unemployment benefits you’ve never filed for or received, it’s best not to ignore it. Contact your state’s unemployment office to report the fraud. It should be able to send you a corrected 1099-G showing you did not get any benefits.

First, report the scam to the correct authorities. If a fraudulent tax return was filed in your name, the IRS will mail you a Letter 4883C or 6330C to verify your identity. You may also need to call the toll-free number provided on the letter and visit an IRS Taxpayer Assistance Center . After reporting the fraud, you’ll likely need to file a paper tax return. Complete an Identity Theft Affidavit (Form 14039) and attach it to the back of your paper return.

If you’ve mistakenly shared your information with a scammer and they’ve stolen your stimulus check, you will likewise need to let the IRS know. Visit Identitytheft.gov where you will receive a personal recovery plan that will hopefully minimize the damage done by the scammer and help you reclaim your lost funds.

It’s tax season and stimulus season, so it’s also scam season! Keep your guard up and follow the tips outlined here to prevent yourself from falling victim to one of the many circulating scams. Stay safe!

Your Turn: Have you been targeted by a stimulus or tax scam? Tell us about it in the comments.

Learn More:
wfmz.com
freep.com
cnbc.com
irs.gov

Beware of PPP Scams

The Paycheck Protection Program (PPP) has been a welcome relief for small businesses struggling to stay afloat while also keeping their employees’ incomes flowing during the coronavirus pandemic.

The program provides eligible businesses with unsecured loans to help them cover payroll, rent and other ongoing business expenses, with the possibility of partial or complete loan forgiveness. The loans are furnished by the Small Business Association (SBA) with applications processed by private lenders or other organizations. There have been many changes and updates made to the PPP since it was first passed on April 24, 2020. Most recently, the SBA began accepting applications for Second Draw PPP Loans on Jan. 11, 2021 from participating lenders.

Unfortunately, the PPP has been plagued by fraud since its inception. In these scams, criminals posing as representatives of the SBA, another government entity or a legitimate lender trick business owners into applying for a loan through their organization, sharing information that can then be used to hack their accounts and more.

Here’s what you need to know about PPP scams and how to avoid them:

How PPP loans are processed

The more you know about how PPP loans work, the stronger protection you’ll have against possible scams.

If you want to apply for a PPP loan, simply download the loan application through the SBA. Fill it out and submit it to an SBA-approved lender. You may also need to provide all or some of the following documents:

  • Tax returns for 2019
  • Payroll reports showing how you achieved your requested total loan amount
  • Documents proving your company’s structure, formation and ownership
  • Verifiable payroll expense documents and breakdown of payroll benefits
  • Payroll summary report with corresponding financial statements
  • Certification that all employees live within the United States. If you have employees overseas, you’ll need to provide a separate list of these workers and their respective salaries.
  • Most recent mortgage or rent statement and utility bills
  • Documentation about how COVID-19 has negatively impacted your business

If you’re applying for a Second Draw PPP Loan, you will also need documentation that showcases how you have used, or plan to use, your original PPP funds.

After you’ve submitted your application, you can sit back and wait for approval. There’s no need to share any additional information on the phone or via email.

How can I protect my business from PPP fraud?

Here’s a list of dos and don’ts to help keep your business safe from PPP scams.

 Do:

  • Be wary of any individuals demanding immediate payment from you, or asking that you make immediate contact with them to be eligible for a PPP loan. These are likely scammers.
  • Only use a lender that is accredited by the SBA. You can find a full list of SBA-approved lenders here.
  • Look for the .gov at the end of each email or website allegedly from the SBA or another government entity, such as http://www.sba.gov.
  • Reach out to your local and state government if you need help applying for a PPP loan.
  • Report any suspected scams to the Better Business Bureau (BBB) and your state’s attorney general office. If a suspicious caller or email contact alleges to represent the SBA, alert the SBA as well.

Don’t:

  • Share any personal information, like your Social Security number or checking account details, with an unverified caller or email contact.
  • Pay for a program that promises to process or expedite a PPP loan request if the organization behind the program is not truly accredited by the SBA. Click on links or download files from an unfamiliar email address. These links could infect your device with malware.

Times are tough all around as the world grapples with the “new normal” and small businesses have been especially hard-hit. PPP loans can help struggling organizations get back on their feet, but scammers don’t want to let that happen. Use the tips outlined above to protect yourself and your business from a PPP scam. Stay safe!

Your Turn: Have you been targeted by a PPP scam? Tell us about it in the comments.

Learn More:
sba.gov
bloomberg.com
ucbi.com
chicagotribune.com

IRS Reveals List of Dirty Dozen Tax Scams for 2020

Each year, the IRS publishes the “Dirty Dozen,” a list of tax scams most prevalent during that year’s tax season. This year, with COVID-19 pushing off the federal tax deadline to July 15, the IRS held off publishing the list until early July, and of course it’s loaded with COVID-19-related scams.SeptFeatured2020_tax-scam

Whether you’ve filed for an extension, you’ve had your taxes filed for months or you’ve gotten them in just in time at the mid-July deadline, be on the lookout for the Dirty Dozen of 2020, which continues spreading for months after Tax Day.

1. Phishing: Fake emails or websites impersonate the IRS in an attempt to steal information about refunds or Economic Impact Payments (EIPs).

Protect yourself: The IRS will never initiate contact with taxpayers via email. Be extra wary of any websites and emails making heavy use of COVID-19 terms like stimulus, coronavirus and Economic Impact Payment.

2. Fake charities: Criminals exploit the fear and uncertainty surrounding the pandemic to set up bogus charities that rob innocent victims who believe they’re helping the unfortunate. The “charity” may even claim to be working on behalf of the IRS to help victims of the virus get their tax refunds.

Protect yourself: Charities with familiar-sounding names that aggressively market themselves are often bogus charities trying to make donors believe they represent the actual well-known organization. They will also refuse to provide an Employer Identification Number (EIN) when asked, and will not have a positive review on sites like Charity.org. Taxpayers can also search for legitimate charities using the IRS charity search tool.

3. Threatening impersonator phone calls: An alleged IRS agent threatens the victim with arrest, deportation or license revocation if taxes are not paid immediately by prepaid gift card or wire transfer.

Protect yourself: The IRS will never threaten a taxpayer or demand immediate payment over the phone. It also will not insist on being paid via gift card or wire transfer.

4. Social media scams: Scammers use information that can be found on social media platforms for a variety of scams, including the impersonation of the victim’s friend to get at the victims’ more private information. This ruse often ends in tax-related identity theft.

Protect yourself: The victim’s “friend” will claim to be in a compromised position and to urgently need the victim’s personal information. When contacted privately, though, the “friend” will have no knowledge of the interaction.

5. EIP or refund theft: Scammers steal taxpayers’ identities, file false tax returns in their names and pocket their refunds and their EIPs.

Protect yourself: Personal information should never be shared online with an unverified contact, even if the contact promises to assist in tax filing or receiving the EIP.

6. Senior fraud: Scammers, or long-term caregivers of the elderly, file tax returns on their behalf and then pocket the refunds and EIPs.

Protect yourself: Seniors should be wary of bogus emails, text messages and fake websites asking them to share their personal information.

7. Scams targeting non-English speakers: Scammers impersonate IRS agents and target non-English speakers, threatening jail time, deportation or revocation of the victim’s driver’s license if an immediate tax payment is not made. The victims have limited access to information and often fall for these scams.

Protect yourself: The IRS will not threaten taxpayers over the phone or insist upon immediate payment.

8. Unscrupulous return preparers: Alleged tax preparers will reach out to the victim and offer their services. Unfortunately, though, they will steal the victim’s personal information, file a tax return on their behalf and pocket the refund, or promise inflated refunds for a bigger fee.

Protect yourself: If a tax preparer is not willing to share their preparer Tax Identification Number (TIN), they are likely to be a scammer. Also, if the alleged preparer promises credits and deductions that sound too good to be true, they probably are.

9. Offer in Compromise scams: Bogus tax debt resolution companies make false claims about settling tax debts for “pennies on the dollar” through an Offer in Compromise (OIC) in exchange for a steep fee.

Protect yourself: An OIC that sounds outrageously attractive is likely bogus. Taxpayers can use the IRS’s OIC tool to see if they qualify for an authentic offer.

10. Fake payments with repayment demands: A scammer steals a taxpayer’s personal information, files a fake tax return on their behalf and has the refund deposited into the taxpayer’s checking account. The scammer then calls the victim impersonating the IRS and claiming the refund was mistakenly inflated, so the victim must return the extra funds via gift card or wire transfer. Of course, this money will go directly into the scammer’s pockets.

Protect yourself: Refund checks will never be deposited in a taxpayer’s account if they have not filed taxes. Also, the IRS does not demand payment by a specific method.

11. Payroll and HR scams: Scams target tax professionals, employers and taxpayers to steal W-2s and other tax information. They will then impersonate the employee and request to change their direct deposit information for their paychecks.

Protect yourself: If an employer or HR representative receives a request for a direct deposit change, it’s best to check with the employee directly to see if the request is legitimate.

12. Ransomware: Malware infects a victim’s computer, network or server, and tracks keystrokes and/or other computer activity. Sensitive data is then encrypted and locked. When the victim tries to access their data, they’ll receive a pop-up message demanding a ransom payment for the return of their information.

Protect yourself: Links embedded in emails from unverified sources should never be opened. Tax software should not be downloaded unless it features multi-factor authentication.

Don’t be a victim of the dirty dozen! Stay alert and stay safe.

Your Turn: Have you been victimized by a tax scam? Tell us about it in the comments.

Learn More:
irs.gov
abcnews4.com

 

 

COVID-19 Texting Scam

Cartoon of a touchscreen phone with COVID-19 graphicThe coronavirus pandemic has been raging on American shores for several months, but scammers are still finding new ways to exploit the panic, fear and uncertainty surrounding the virus to con people out of their money. The latest in a string of coronavirus scams involves a simple text message with criminal intent.

Here’s all you need to know about the coronavirus text scam.

The scam starts out with the victim receiving an alarming text message informing them that someone they’ve recently been in contact with is infected with COVID-19. They are then told to self-quarantine and to get tested for the virus.

Here is the actual text from one of these scams:
“Someone who came in contact with you tested positive or has shown symptoms for COVID-19 & recommends you self-isolate/get tested.”

The text also includes a link for the recipient to click for more information. Many unsuspecting people who read these messages innocently click on the link and play right into the scammers’ hands. The link provides the scammer with access to the victim’s device. The scammer can then scrape the victim’s personal information off the phone and use it to empty the victim’s accounts, open lines of credit in their name or even steal their identity.

If you receive a text message like the one described above, do not respond or click on any embedded links. Report the text to local law enforcement agencies, place the number associated with the message on your phone’s “block number” list and delete the message. You can also warn your friends about the circulating scam to keep them from falling victim.

Stay vigilant and stay safe!

Your Turn:
Have you been targeted by a coronavirus texting scam? Tell us about it in the comments.

Learn More:
fox29.com
katu.com
consumer.ftc.gov

Beware of Coronavirus Scams

Man staring menacingly at camera while wearing a medical maskScammers are notorious for capitalizing on fear, and the coronavirus outbreak is no exception. Showing an appalling lack of the most basic morals, scammers have set up fake websites, bogus funding collections and more in an effort to trick the fearful and unsuspecting out of their money.

The World Health Organization (WHO) has published on its website a warning against email scams connected to the coronavirus. The agency claims it has received reports from around the world about phishing attempts mentioning coronavirus on an almost daily basis.

Closer to home, the Federal Trade Commission (FTC) is warning against a surge in coronavirus scams, which are being executed with surprising sophistication, so they may be difficult for even the keenest of eyes to spot.

The best weapons against these scams are awareness and education. When people know about circulating scams and how to identify them, they’re already several steps ahead of the scammers. Here’s all you need to know about coronavirus-related scams.

How the scams play out
There are several scams exploiting the fear and uncertainty surrounding the virus. Here are some of the most prevalent:

The fake funding scam
In this scam, victims receive bogus emails, text messages or social media posts asking them to donate money to a research team that is supposedly on the verge of developing a drug to treat COVID-19. Others claim they are nearing a vaccine for immunizing the population against the virus. There have also been ads circulating on the internet with similar requests. Unfortunately, nearly all of these are fakes, and any money donated to these “funds” will help line the scammers’ pockets.

The bogus health agency
There is so much conflicting information on the coronavirus that it’s really a no-brainer that scammers are exploiting the confusion. Scammers are sending out alerts appearing to be from the Centers for Disease Control and Prevention (CDC) or the WHO; however, they’re actually created by the scammers. These emails sport the logo of the agencies that allegedly sent them, and the URL is similar to those of the agencies as well. Some scammers will even invent their own “health agency,” such as “The Health Department,” taking care to evoke authenticity with bogus contact information and logos.

Victims who don’t know better will believe these missives are sent by legitimate agencies. While some of these emails and posts may actually provide useful information, they often also spread misinformation to promote fear-mongering, such as nonexistent local diagnoses of the virus. Even worse, they infect the victims’ computers with malware which is then used to scrape personal information off the infected devices.

The phony purchase order
Scammers are hacking the computer systems at medical treatment centers and obtaining information about outstanding orders for face masks and other supplies. The scammers then send the buyer a phony purchase order listing the requested supplies and asking for payment. The employee at the treatment center wires payment directly into the scammer’s account. Unfortunately, they’ll have to pay the bill again when contacted by the legitimate supplier.

Preventing scams
Basic preventative measures can keep scammers from making you their next target.

As always, it’s important to keep the anti-malware and antivirus software on your computer up to date, and to strengthen the security settings on all of your devices.
Practice responsible browsing when online. Never download an attachment from an unknown source or click on links embedded in an email or social media post from an unknown individual. Don’t share sensitive information online, either. If you’re unsure about a website’s authenticity, check the URL and look for the lock icon and the “s” after the “http” indicating the site is secure.

Finally, it’s a good idea to stay updated on the latest news about the coronavirus to avoid falling prey to misinformation. Check the actual CDC and WHO websites for the latest updates. You can donate funds toward research on these sites as well.

Spotting the scams
Scammers give themselves away when they ask for payment via specific means, including a wire transfer or prepaid gift card. Scams are also easily spotted by claims of urgency, such as “Act now!” Another giveaway is poor writing skills, including grammatical errors, awkward syntax and misspelled words. In the coronavirus scams, “Breaking information” alerts appearing to be from health agencies are another sign of a scam.

You can keep yourself safe from the coronavirus by practicing good hygiene habits and avoid coronavirus scams by practicing healthy internet usage. Keep yourself in the know about the latest developments.

Your Turn:
Have you been targeted by a coronavirus scam? Tell us about it in the comments.

Learn More:
consumer.ftc.gov
wsj.com
blog.malwarebytes.com