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Current ScamsTax Time Means Tax Scams (2/18/2010)
Tax-filing season brings out tax-preparation frauds. The latest sheme involves tax refunds transmitted as a direct deposit or automated clearing house (ACH) credit. Consumers are being drawn in to fraud schemes by individuals claiming to be tax preparers.
In this type of fraud, the victims unwittingly provide the bogus tax preparers with personal information such as their name, Social Security number, bank account numbers, investment information and more so the preparers can complete the tax forms. The tax preparer inflates the information with fraudulent information to obtain a larger refund. Some victimes have found their tax preparers have claimed children they don't have, day care expenses and so on.
The tax refunds are transmitted as direct deposit (ACH credit) to a newly created account or to an existing account with an impersonator added as a joint owner. These accounts are established by an impersonator or a recruiter. Once the tax refund is deposited into the account, the impersonator or recruiter withdraws the tax preparation fee. The remainder of the ACH credit goes to the refund recipient.
The Internal Revenue Service (IRS) will attempt to reclaim the ACH credits involving fraudulent tax returns. Last year the IRS prosecuted more than 200 people as phony tax preparers. The IRS is already busy checking up on new tax scams, ranging from filing false returns to convincing clients they don't need to pay income taxes.
Be extra careful when a preparer bases the fee on a percentage of a promised refund. Consumers shouls also avoid preparers who claim to know something special or that they can get more money than anyone else. Also plan to sit with the preparers as they fill out the tax forms. Never just sign a blank form and trust them to file it.
New Recruitment Scam Using Craigslist Targets Credit Unions
Advertisements have been posted on Craigslist as part of member recruitment scams nationwide. The ads solicit current credit union members and offer $75.00 or more for their assistance in gaining membership for ineligible individuals. The scam is targeting credit unions and members across the country.
The following are samples of Craigslist ads targeting credit union members for this recruitment scam:
If your a ABC Credit Union Member MAKE SOME EXTRA $$
This is NOT a scam! I am willing to call you and discuss extensively! I need a ABC Credit Union Member to sponsor me into the credit union. I am willing to pay $100 USD for this service. Please email me and we can discuss this in detail. This is a 1 day process and I want to become a member for investment account/interest rate purposes.
Need to find XYZ Credit Union Member
I was just approved for a visa credit card with XYZ Federal Credit Union and they called me and said that they can not process the application if I do not know any existing member or if I am not employed at one of the list of companies they have. To become a member you have to know a member. So now my app is on hold until I can find someone who is already a member. If you know someone, please tell them to contact me. I am willing to pay $500. And all they ask for is the members name and member number. Thanks.
ABC and XYZ Members Needed!!!
If you are a ABC or XYZ Federal Credit Union member we will pay you $75.00 per member to sponsor other that would like to join the credit union but do not meet the membership requirements. Please email me for details.
Do not fall for this scam. Your participation in a scam such as this is illegal. Contact us if you are approached with this scam.
Maine's Bureau of Financial Institutions Joins FDIC in Warning Consumers about New Phishing Attempt
GARDINER, MAINE - Bureau of Financial Institutions' Superintendent Lloyd P. LaFountain III is joining officials at the Federal Deposit Insurance Corporation (FDIC) in warning consumers about the ongoing circulation of a fraudulent e-mail purporting to be from the FDIC and asking recipients to open a "personal FDIC insurance file" to review their deposit insurance coverage.
Superintendent LaFountain stresses that the FDIC is not sending out this e-mail. He noted that the subject line of the e-mail includes the words "Check Your Bank Deposit Insurance Coverage," but he emphasizes that the subject line may change over time. The e-mail reportedly states:
"You have received this message because you are a holder of a FDIC-insured bank account. Recently, FDIC has officially named the bank you have opened your account with as a failed bank, thus, taking control of its assets."
Recipients are then asked to visit the official FDIC website by clicking on a link in the message, which takes them to a phony website. The site includes links that appear to open forms. However, the FDIC believes that clicking on the links may cause the installation of malicious software intended to collect personal or confidential information, some of which may be used to gain unauthorized access to online banking services or to conduct identity theft. Information about counterfeit items, cyber-fraud incidents and other fraudulent activity may be forwarde to the FDIC's Cyber-Fraud and Financial Crimes Section, 550 17th Street, N.W., Room F-3054, Washington, D.C. 20429, or transmitted electronically to alert@fdic.gov. Information related to federal deposit insurance or consumer issues should be submitted to the FDIC using an online form that can be accessed at http://www2.fdic.gov/starsmail/index.asp.
Superintendent LaFountain reminded consumers that these scams are known as "phishing" when e-mail is used and "vishing" when it's conducted through telephone calls. This fraudulent activity generally attempts to acquire sensitive information, such as passwords or pin numbers, for using in accessing financial accounts. The Bureau has been made aware of recent activity targeting customers of at least three Maine-based financial institutions. Non-customers have also received the messages.
"Although most consumers have become aware of phishing scams, the calls and e-mails can seem entirely legitiate," LaFountain commented. "This acivity can catch any of us off-guard and before we know it, personal information has been shared. We should remind ourselves and others that banks and credit unions do not typically send out mass e-mail or automated voicemail messages in which personal financial information is requested."
In issuing its warning, the Bureau urges consumers to confirm the authenticity of all solicited messages from their financial institution. Additionally, the Bureau recommends that consumers:
- Never provide personal information, including financial account details and Social Security Numbers, to anyone unknown to them.
- Use great caution before providing personal information that could be used to access financial accounts through e-mail or the Internet
- Never provide account information over the phone when contacted unexpectedly by someone claiming to be from a bank or credit union; follow up with the institution by phone or in person.
- Safeguard passwords, pin numbers and other account-accessing details or codes; never write that information on credit/debit cards or carry in a wallet or purse.
- Contact the Bureau to report potential fraud; to obtain more details about Financial Privacy (www.maine.gov/pfr/privacy_links.htm); or to access the agency's Consumer Protection Library (www.maine.gov/pfr/financialinstitutions/consumer/library.htm).
MoneyGram to Pay $18 Million to Settle FTC Charges That It Allowed Its Money Transfer System To Be Used for Fraud
MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of million of dollars.
The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada- after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans.
In many of the scams that used MoneyGram's money transfer system, the con artists used counterfeit checks to induce consumers to send money back by wire transfer. The most prevalent of these scams were lottery or prize schemes in which consumers were told they had won thousands of dollars and just had to pay a fee for "taxes," "customs," or "insurance" to a third-party to collect their winnings. Consuners paid the fee using MoneyGram, but received nothing. In another scheme, telemarketers told consumers they were guaranteed loans, regardless of their credit score. All they had to do was pay "insurance," "paperwork," or "processing" fees to complete the transaction. Consumers who sent funds using a money transfer service got nothing in return.
In mystery shopping scams, the con artists called U.S. consumers or sent them a piece of direct mail in which they claimed to be hiring consumers to visit stores such as Wal-Mart to evaluate MoneyGram money transfer operations. The con artists sent consumers a cashier's check, telling them to deposit it in their checking account and then send most of the money back using a money transfer at Wal-Mart. When the counterfeit checks bounced, consumers realized they had lost the money they transferred.
Avoid telemarketing and money transfer fraud. Don't wire money to:
- someone you don't know, in the U.S. or in a foreign country;
- someone claiming to be a relative in the midst of a crisis and who wants to keep the request for money a secret;
- someone who says a money transfer is the only form of payment that's acceptable; or
- someone who asks you to deposit a check and send some of the money back.
If you were a victim of a scam using MoneyGram Wire Services, call 202-326-3755 for information on the process of potential restitution.
ATTENTION DEBIT AND CREDIT CARD MEMBERS...
To prevent fraud from occurring on our members' accounts, we have temporarily blocked signature based transactions (credit option) at retail merchants only. However, you may still use the PIN based option (debit) to perform your transaction.
If you notice fraudulent transaction on your account, please contact Card Services as soon as possible.
If you do not know your Debit Card PIN, please call Kathy or Christine at 777-6202.
URGENT - NEACH Reports Scam E-Mail
This e-mail appears to be from NACHA, The Electronic Payments Association, telling the recipient that there is a problem with an ACH transaction they have originated. The e-mail includes a link which redirects the individual to a fake web page which appears like the NACHA website and contains a link which is almost certainly an executable virus with malware. The scam e-mail appears like this:
From: nacha.org [mailto:report@nacha.org]
Sent: Thursday, November 12, 2009 10:25AM
To: Doe, John
Subject: Rejected ACH transaction, please review the transaction report.
Dear bank account holder,
The ACH transaction, recently initiated from your bank account, was rejected by the Electronic Payments Association. Please review the transaction report by clicking the link below:
Unauthorized ACH Transaction Report (This is how the link is presented)
DO NOT CLICK ON THE LINK. JUST DELETE THE EMAIL. THIS EMAIL IS A SCAM THAT CONTAINS A VIRUS!
Protecting Personal Information
The IRS has issued a warning to consumers: Steer clear of identity theft scams that use the tax agency's name, logo or Web site. Criminals may also use other federal agency names, such as the U.S. Department of the Treasury, in an attempt to convince taxpayers that a scam is a genuine communication.
In identity theft crimes, fraudsters try to trick victims into revealing personal information. This can include credit card numbers, bank account information, passwords, Social Security numbers and more. Often, the criminals pose as a trusted government, financial or business institution or official.
Generally, identity thieves use someone's personal data to steal financial accounts, run up charges on existing credit cards, apply for new loans, credit cards, services or benefits in the victim's name and even file fraudulent tax returns.
The IRS urges consumers to avoid becoming a victim of four recent schemes:
Rip-Off #1: Claim the "Making Work Pay" Refund
This e-mail message, purportedly from the IRS, mentions the Making Work Pay provision, which is part of a law passed earlier this year. The message states there is a refundable credit available to workers, consumers and retirees that can be paid into the recipient's bank account if the person provides information to the IRS. The e-mail contains links to "register" and claim the tax refund.
The IRS explains that most wage-earners receive the Making Work Pay credit in their paychecks as a result of decreased tax withholding, not as a lump sum distribution paid into a bank account. Consumers and retirees who are not wage earners are not eligible for the tax credit.
Rip-Off #2: Collect Inherited Funds, Lottery Winnings or Cash Consignment
In this scheme, recipients receive e-mail messages claiming to come from the U.S. Department of the Treasury. The messages notify recipients that they will receive millions of dollars in recovered funds, lottery winnings or cash consignment if they provide personal information, including phone numbers, via return e-mail.
The e-mail may be just the first step in a multi-step scheme. Later, the victims may be contacted by telephone or further e-mail messages and instructed to deposit taxes on the funds or winnings before they can receive them. Alternatively, a victim may be sent a phony check of the funds or winnings and told to deposit it but pay 10 percent in taxes or fees. Thinking that the check must have cleared the bank and is genuine, some people comply. However, the scammers, not the Treasury Department, get the money.
Rip-Off #3: Fill Out IRS Form W-8BEN
In this scam, fraudsters modify a genuine IRS form, the W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. On it, victims are asked to provide detailed personal and financial information. This could include nationality, passport number, bank accounts, passwords, spouse's name, mother's maiden name, or other information for financial accounts. The scammers may use the actual IRS form number and name, or may make up a new form number, such as W-4100B2.
The form or letter is either e-mailed or faxed. The letter, which claims to come from the IRS, states that the recipient will face additional taxes unless he or she quickly faxes the required information to the number provided by the scammer.
In reality, required taxpayers file Form W-8BEN with their financial institutions, not with the IRS. Additionally, the genuine W-8BEN does not request a taxpayer's passport number, bank account number, and other information.
Rip-Off #4: Receive a Tax Refund
This bogus e-mail, which claims to come from the IRS, tells the recipient that he or she is eligible to receive a tax refund for a certain amount. It instructs the recipient to click on a link contained in the e-mail to access and complete a form, which requires personal and financial information. These types of refund promises are the most common scam the IRS has seen. Recent variations have claimed to come from the IRS Exempt Organization office. Others have included the name and purported signature of a real or a made-up IRS executive.
Taxpayers do not have to complete a special form to obtain refunds. They are based on the tax returns submitted to the IRS.
How to Spot a Scam
Keep in mind that the IRS does not discuss tax account matters with taxpayers by e-mail. Despite this fact, many e-mail scams are fairly sophisticated and hard for many people to detect. Here are some clues:
- Beware of e-mail messages that request detailed personal and/or financial information, or an unusual amount of it. This can include your name, Social Security number, bank or credit card account numbers or security-related information, such as your mother's maiden name. The information can be requested in the e-mail itself or on another Web site you are sent to with a link.
- Don't take the bait on enticing messages, such as those mentioning a tax refund or offering to pay you to participate in a survey.
- Don't respond to e-mail messages that threaten a consequence for not responding, such as additional taxes or blocking access to funds.
- Watch out for correspondence that gets the names of the Internal Revenue Service or other federal agencies wrong. Similarly, many con artists use incorrect grammar or odd phrasing. The reason: Many of the e-mail scams originate overseas and are written by non-native English speakers.
- Don't click on links in messages with really long addresses or URLs that do not start with the actual IRS Web site address (www.irs.gov). To see the actual link address, move the mouse over the link included in the text of an e-mail. The only genuine IRS Web site is IRS.gov. Anyone wishing to access the site should initiate contact by typing www.IRS.gov into their Internet address window, rather than clicking on a link in an e-mail.
What to Do if You Receive a Suspicious Message
If you receive a suspicious e-mail claiming to come from the IRS, take the following steps:
- Do not open attachments to e-mail messages, in case they contain malicious code that can infect your computer.
- For the same reason, don't click on links. Be aware that the links often connect to a phony IRS Web site that appears authentic and then prompts the victim to enter personal identification. The fake Web sites appear legitimate because the appearance and much of the content are directly copied from actual pages on the IRS site and then modified by scammers for their own purposes.
- Contact the IRS at 1-800-829-1040 to determine whether the IRS is trying to contact you.
- Forward the suspicious e-mail or URL address to the IRS at phishing@irs.gov, then delete the e-mail from your inbox.
Scammers Find Lucrative Business from Funerals
Be on the lookout for yet another scam: online guest books for deceased individuals. This is a site where family and friends can share stories about the deceased, leave messages of support for each other, and upload pictures. But Consumer Reports warns that scammers have easy access to the e-mail addresses some visitors put on the guest book site. Crooks then send phony messages, stating that a long-deceased relative owes them money that will be released as soon as fees are paid to an overseas bank account. In some cases, the letter writers claim to be officials of foreign governments. Many people have been fooled-even when they aren't distracted by grief.
Avoid being a victim of online guestbooks:
- Refuse to respond to anyone or any company that requests an advance payment of fees.
- Add the email address of the sender to your "block address" list.
- Notify your local or state consumer protection office of the scam so they can pass the information on to authorities and warn others.
- If you receive a check, take it to your credit union and tell them how you received it. Ask them if they can verify the authenticity of the check. If you deposit it, you may be liable for repaying any funds you withdraw against it.
Phishing' Scam Uses Fake Publishers Clearing House
A local organization received a letter and a check reportedly from Publishers Clearing House in the amount of $5,890.00. The credit union also received a phone call wanting to verify funds on a check owned by the local organization that it was written to by this company, who would not identify themselves, that appears to be fraudulent. The account that the check was written from is now closed. Please be aware that this scam is currently going on in our area.
Phishing Scam -
Fraud Disguises Itself as an Email from NCUA
A fraudulent e-mail seeking credit card information (known as a "phishing fraud") has been circulating nationwide. This fraudulent phishing email appears to be from NCUA and contains a link purportedly to obtain a subscription for the NCUA Express Subscription service.
When that link is used, the recipient is directed to a "clone" of the NCUA Express Service site that seeks credit card information from those to whom the phish was sent. If you receive such an email, please ignore it, as it is fraudulent. The NCUA does NOT charge for the Express Subscription service and does NOT solicit credit card information over the Internet. If you have questions or comments, please contact the NCUA Fraud Hotline at 800-827-9650 or, during off duty hours, at 703-728-0700.
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