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Watch Out for This New Tax Scam

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Tax season can be the most profitable time of year for savvy thieves. And just a week into filing season, the IRS has uncovered a new trick cybercriminals are using to scam you out of your money.

The IRS warns tax preparers and consumers about a new scam in which criminals are using consumers’ account details to deposit refunds. They then contact the consumer posing as debt collection agency officials, claiming that the refund was deposited in error, and have the consumer send the funds directly to them.

This scheme is only one of many that thieves will use to dupe you out of your money this tax season, the IRS warned in a statement Friday.

During tax time, the IRS receives millions of fake tax returns as a result of what the FBI refers to as Stolen Identity Refund Fraud (SIRF) crimes, resulting in billions of dollars in fraudulent refunds every year.

Let the IRS know immediately if you think you’ve been a victim of a tax scheme. But the best course of action, whether you’re a consumer or a tax professional, is to protect yourself from becoming a victim in the first place.

Although this latest development shows that with the help of technology, thieves are becoming savvier, an old trick is at the root of the majority of SIRF crimes. Someone, in this case, a tax preparer, takes the bait and clicks a malicious link in a phishing email.

The IRS is urging tax preparers to review the Security Summit’s Don’t Take the Bait campaign, which highlights numerous scams cyber thieves and fraudsters use to fool tax professionals. Tax pros should undergo a cybersecurity overhaul to better secure their clients’ valuable data. Ask your tax preparer if they are taking these steps.

Here are other scams, and ways to protect yourself from them during tax season.

Don’t take the bait

Most of us have learned not to fall for phishing scams, but they can be convincing, especially if you’re not sure how the IRS operates. Don’t open suspicious emails or click on links or attachments in emails from people you don’t know.

The IRS doesn’t contact consumers via email, social media, or text messaging channels, and would never request personal information through any of those platforms. If you think you’ve been contacted by an IRS imposter through one of these channels, immediately report the interaction.

What about those phone calls?

Scammers may alter their phone numbers to make it look like the IRS or a government agency is calling.

These callers may use fake IRS titles and badge numbers to seem official. Those trying an IRS impersonation scam might even know your name, address and other personal information. But don’t be frightened into making a costly mistake.

If you don’t owe an immediate payment, hang up. Then, report the call to the Federal Trade Commission.

If you owe taxes, or you’re not sure, hang up and call the IRS at 800-829-1040 where IRS workers can help you.

Choose a tax preparer you trust

In the same way that you wouldn’t leave your children in the hands of a babysitter you don’t know, don’t put your money and critical information about your life in the hands of someone you can’t trust.

Half of the nation’s tax returns are prepared by paid preparers, but only 40 percent are required to adhere to the IRS professional standards, according to 2015 data from the Consumer Federation of America. If data is taken from the wrong tax preparer, you could pay the price by having your identity stolen.

Do your homework when searching for someone to help you do your taxes. The IRS has an online directory to help you find a certified tax pro.

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Does Western Union Owe You Money? Company Settles FTC Lawsuit for $586M

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*Update 3/22/18: Some consumers have reported a new scam targeting people who might be owed a refund from this Western Union settlement. The FTC says “people are getting official-looking emails about the Western Union settlement. The thing to know is that you cannot apply for a refund by email. The scam emails we’ve seen ask for information about your Western Union transaction, along with your name and address.”

By now, many consumers know to automatically delete suspicious emails or social media messages requesting wire transfers from Nigerian princes or scammers posing as long-lost relatives. 

Even so, people have lost millions of dollars to fraudsters via wire transfer scams. If you’ve fallen victim to a wire transfer scam involving Western Union, you might want to pay attention to this news.  

Consumers now can file claims to recoup money lost when scammers told them to pay via Western Union’s money transfer system, as part of a $586 million federal settlement with the company that was announced this week.  

The deadline to file claims with the U.S. Department of Justice is May 31, 2018. The settlement applies to scams executed through Western Union between Jan. 1, 2004, and Jan. 19, 2017. 

“American consumers lost money while Western Union looked the other way,” Federal Trade Commission (FTC) Acting Chairman Maureen K. Ohlhausen said this week in a press release. “We’re pleased to start the process that will get that money back into consumers’ rightful hands.”  

The settlement stemmed from a January 2017 complaint against the company by the FTC, which said that lax security policies have made the popular money transfer service a way for scammers to defraud consumers.   

The case was investigated with the assistance of the Department of Justice, the Postal Inspection Service, the FBI and several local law enforcement agencies.  

“Returning forfeited funds to these victims and other victims of crime is one of the department’s highest priorities,” Acting Assistant Attorney General Kenneth A. Blanco, of the Justice Department’s Criminal Division, said in a Nov. 13 statement. 

Western Union also has agreed to implement an antifraud program and enhance its policies on federal compliance obligations.  

What kinds of scams are covered?

variety of scams may be covered by this settlement, according to the FTC, including but not limited to the following: 

  • Internet purchase scams: You paid for, but never received, things you bought online. 
  • Prize promotion scams: You were told you won a sweepstakes and would receive your winnings in exchange for payment, but you never received any prize. 
  • Family member scams: You sent money to someone who was pretending to be a relative in urgent need of money. 
  • Loan scams: You paid upfront fees for a loan, but did not get the promised funds. 
  • Online dating scams: You sent money to someone who created a fake profile on a dating or social networking site.  

How do I submit a claim?

If you’ve already reported your losses to Western Union, the FTC or a government agency, you may receive a form in the mail from Gilardi & Co., the claims administrator hired by Justice to handle refunds. This form will include a claim ID and a PIN that you’ll need when filing your claim online at www.ftc.gov/wu 

The deadline to file is May 31 ,2018.

You also can file a claim if you did not receive a form in the mail. Visit www.ftc.gov/wu and click on the link indicating that you did not receive a claim form and follow the instructions to complete your filing. 

If you sent money to a scammer via Western Union, file a claim even if you don’t have any paperwork, according to the Justice Department. You may still be eligible for a refund. 

You can file more than one claim, if you were a scam victim more than once. 

Will I definitely get my money back?

Hard to say. Each claim will be verified by the Justice Department. If your claim is verified, the amount you get will depend on how much you lost and the total number of consumers who submit valid claims.  

If verified, you’re only entitled to a refund of the actual amount you transferred through Western Union, according to the Justice Department. Other expenses, like fees or transfers sent through other companies, will not be included in your refund. 

It could take up to a year to process and verify your claim. The best way to stay in the loop is to bookmark the FTC page for the Western Union settlement or westernunionremission.com and check frequently for updates.