The top three scams of 2016 — tax scams, debt collection scams and sweepstakes /prizes/gift scams, were the same as in 2015, the Better Business Bureau of Southeast Florida and the Caribbean said Wednesday.
The Internal Revenue Service has said that rampant identity theft by criminals who file fraudulent returns using someone else’s Social Security number is the nation’s biggest tax-related scam.
The IRS estimates it will lose $26 billion due to fraudulent refunds from 2012 through this year.
Florida has been a hotbed for identity theft that exploits the way the IRS doles out tax refunds.
Most victims find out when they file their tax returns electronically and it bounces back because someone has already filed a return using their identity.
Based on more than 30,000 reports consumers submitted on bbb.org/scamtracker, the other top seven scams for 2016 are online purchase, employment, government grant, tech support, advance fee loan, fake check/money order and phishing.
Reports to the Better Business Bureau from victims of the “IRS tax scam” have dropped dramatically since police raided nine call centers in Mumbai, India earlier last month, the BBB said Monday.
The scam involves robo callers or actual people who call victims and pretend they are with the IRS. They threaten their targets with financial penalties, lawsuits, and even arrest if they don’t pay the back taxes they supposedly owe.
The tax scam has accounted for about one in four reports to BBB’s Scam Tracker in its first year of operation. But since the raid, there has been a 95 percent decline in new reports. In a typical week, BBB Scam Trackers receives approximately 200 reports on tax scams. Now it’s about 11 a week.
Of the 770 employees working at the Mumbai call center when the midnight raid was conducted, 70 people were charged with fraud and other crimes, according to news reports, and the rest are under investigation.
Emma Fletcher, manager of BBB Scam Tracker warns that scammers are opportunists.
“Hopefully, this crew won’t be stealing from anyone again for a long while. But we will be keeping an eye on incoming scam reports so we can alert consumes what the ‘next big thing’ in scams turns out to be,” Fletcher said.
Often, scammers who are shut down re-open in another location under a different name.
Police in India said the callers were trained to speak with an American accent. The call centers were bringing in $150,000 a day over the last year. The victims’ would transfer their money to U.S. bank accounts before it was sent to India.
Law enforcement officials in India reported that the call center owners escaped, and that that they were believed to be working with accomplices in the U.S.
A new scam is targeting seniors, preying on fears that they could lose Social Security benefits. Seniors are scared into donating to this fake cause and providing their personal information, the Better Business Bureau warned Friday.
Seniors across the country are receiving letters in the mail asking for a donation of $16.45 to fund the work of a group called the National Council for Survivors.
The letters claim Congress is attempting to abolish Social Security, and this group is working to save the benefits.
They are allegedly mailing referendum ballots to every senior citizen in the country, allowing them to vote to keep the government program.
The BBB is warning people not to donate to any group making such claims.
If you send money, you will be out $16.45. Victims who fill out the form to make a credit card donation, open themselves up to ID theft and additional fraudulent charges. As usual, the scam varies slightly in different reports. The name of the advocacy group often changes and so does the exact language used.
How to spot this phishing scam:
Be wary if you are being asked to act immediately. Scammers typically try to push you into action before you have had time to think.
Don’t share your credit card information. Paying by credit card is typically a great way to protect yourself when purchasing online. But sending your name, address and credit card information to scammers opens yourself up to ID theft and other cons.
If it seems too outlandish to be true, it probably is: Many cons snare victims by offering deals too good to be true. But some, like this, scare targets into taking action. Either way, use common sense and a quick web search.
Know your government: In the United States, referendums are not held on the national level and differ from state to state. Outside organizations do not pay for referendum ballots to be sent to voters.
Millenials are more vulnerable to scams than Baby Boomers, the BBB Institute for Marketplace Trust said Wednesday.
Marketplace scams affect one in four North American households each year, and losses are estimated at $50 billion, yet most consumers believe they are invulnerable.
The research, Cracking the Invulnerability Illusion: Stereotypes, Optimism Bias, and the
Way Forward for Marketplace Scam Education, is based on a survey of more than 2,000
adults in the U.S. and Canada.
Download “Cracking the Invulnerability Illusion” at BBB.org/TruthAboutScams.
“We’ve bought into stereotypes about scam victims – they’re usually seen as vulnerable and
elderly, or gullible and poorly educated,” said the paper’s co-author Emma Fletcher,
product manager with the BBB Institute, Council of Better Business Bureau’s foundation. “These stereotypes arestrongly held… and they are wrong. We are all at risk, but younger and more educated individuals are actually the most likely to be scammed.”
“Optimism bias – the idea that we all think other people are more vulnerable than we are –
is associated with risk-taking and failure to heed precautionary advice,” said co-author
Rubens Pessanha, CBBB director of marketing research and insights.
“Seniors may be the one group that does not suffer from optimism bias when it comes to scams. They’ve heard, loud and clear, that they are at risk. Seniors may very well be more scam savvy than
others. They are also less impulsive buyers than younger consumers, and less likely to be
making purchases online where so many scams take place.” Pessanha said.