‘Tis the Season
Scams have been around from the beginning of time. There is always someone out there eager to make money without really making it. I have always said that scammers are like squirrels. There is no such thing as a squirrel-proof birdfeeder because the squirrels will try and try again to get in. It is the same with scammers. If one thing doesn’t work, then try another. They are relentless. And now we are in tax season. This is fertile ground for scammers. There is money to be made for them and lost for you. What can you do?
Know the Enemy
The best way to avoid being scammed is to get to know what scammers do. There are recurring themes in scams, and I will go into the most common to help you know what to do, or in most cases what not to do. One way you can recognize a scam is that the email or chat, in the case of online scams, is written with poor English. Let that be your first clue. Here are some of the most common scams in use today.
Phishing scams
This is the use of phone calls or emails to try to get you to either reveal information or click on a link by pretending to be a company or friend. They are fishing (hence the term) for information that could be useful. Sometimes, when it is an email, it appears to be from a company where you have an account. They have a link for you to click to reset your password, enter data or otherwise update your account. If it is from a friend, it may just be a “check this out” message with a link or attachment. Be extremely cautious with links and attachments.
For links verify that the address in the link matches the website of the company you deal with. For instance, if the company is xyz and you normally go to them at http://www.xyz.com make sure the link on the email starts with http://www.xyz.com. Sometimes scammers will put text that says one thing, but the link actually goes somewhere else. Hover over the link and make sure the text that pops up matches the website. If you didn’t request to reset your password, then don’t use the link to reset your password. The safest way to go to the website to update data is to log onto your account the way you usually do and skip the link all together, then update the data there.
Attachments should never be opened from unknown senders. If your friend sends an attachment, make sure that the email is really from your friend. Almost any attachment can contain malware including viruses, ransomware and keyloggers which I will cover in another article. So, if you were not expecting something from a friend then verify it with your friend before opening. Don’t verify by replying to the email, instead call or send a new email or chat message to verify that your friend was really sending something.
Lottery scams
In this case you supposedly have won money, will inherit, or someone wants to give you money to get around some restriction (also known as the Nigerian prince scam). The scammer will want a processing fee for your winnings, your social security number for your inheritance or your bank account number to use to transfer vast amounts of wealth where you get a percentage. None of that will ever happen.
Lotteries, sweepstakes, and other contests never have a processing fee. If you have inherited something, then the tax on that inheritance is your responsibility and your social security number is not needed and finally there is no Nigerian prince.
Don’t send money to strangers or provide them credit card numbers. Never give out your social security number over the phone or in email and don’t provide your bank account information. If it sounds too good to be true it probably is.
Threat Scams
These are the scariest. The scammer appears to have information about you. They may even have a password that was leaked from a data breach. See my article on passwords on why you need to change often! Sometimes they claim your computer has a virus or malware. These are typically phone calls from Microsoft. Sometimes the caller will get very belligerent on the call. They will bully you into buying their product.
They are fake. Microsoft doesn’t call you. They have no idea if your computer has a virus. Don’t buy antivirus software from a caller claiming you have a virus no matter how much they bully, just hang up. There is no way for them to know if you have a virus or not.
Don’t pay the scammers threatening to expose a secret, they don’t really have what they claim to have. They are making it all up. The scammers who ask for bitcoin to prevent the exposure of embarrassing information just bought your password from a data breach and they are using that information to make their threat appear legitimate. All they want is money and will go away if you ignore them, eventually. This is different from ransomware which I will cover in another article.
Gift Card Scams
You suddenly get an email from a friend who for some reason can’t get to his or her computer (even though he is sending you an email…hmm, that’s fishy) and needs to urgently send a gift to someone (hmm, that’s fishy too). They want you to go to Amazon or Apple, buy a gift card for someone else and have it emailed to the other person. You may also notice that your friend forgot a lot of his or her native language.
By now you should know the drill: don’t feed the squirrels! Your friend will not do these things. It is likely your friend’s email was hacked (see article on passwords). Call your friend and let them know they have been hacked. That email is no good to them anymore. It is very likely they can’t get it back.
Special tax scams
During the tax season there is a lot of money moving around. You are either paying or expecting a refund. Either way the scammer wants to intercept it. Alternatively, they might drop back to a variation on the lottery scam and request a fee for filing your taxes, but they don’t really file.
In order to intercept your refund, they will use your credentials that have been stolen by another scam, usually phishing, but sometimes a data breach. Do not respond to an email to verify your EFIN before e-filing. See this article by the IRS.
Scammers are also targeting your stimulus check. Generally, they will use phishing to try to get your information or have you sign over your check. The IRS has another article regarding these scams.
Finally, make sure you are paying a reputable preparer for your tax preparation. If you have been using the same person or firm for years you have no worries. However, if you are looking for someone new then read this on how to pick a tax preparer also from the IRS.
Final words
So, how can you protect yourself? Be very careful about clicking on links or attachments in emails, don’t give out your personal or banking information to strangers and be wary of offers that sound too good to be true. Be aware that your money and your personal information is the food for these squirrels. Try not to feed them!