IRS imposter scam reports to BBB drop, but could easily surge again

Call centers in India where a tax scam was based was shut down, but such centers often re-open in a new location.
Call centers in India where a tax scam was based was shut down, but such centers often re-open in a new location.

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.

Listen to IRS imposter scam robocall that threatens a lawsuit

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.

 

 

 

What’s the fastest growing consumer complaint?

Complaints about phony IRS agents and other imposter scams, tax ID theft and energy services were the top three fastest-growing complaints last year, according to a report released Wednesday.

When you answer the phone, how can you be sure the caller is telling you who they really are? (Getty Images)
When you answer the phone, how can you be sure the caller is telling you who they really are? (Getty Images)

Susan Grant, director of consumer protection and privacy at the Consumer Federation of America, said, “Scammers are always changing their pitches and looking for things that work. The IRS phony agent obviously works. It scares the heck out of people.”

The Consumer Federation of America and the North American Consumer Protection Investigators report is based on input from 33 consumer agencies from 21 states, including the Florida Department of Agriculture and Consumer Services.

To read the full report, which provides additional suggestions for new laws as well as descriptions of agencies’ biggest achievements and challenges and tips for how consumers can protect themselves, click here.

Grant said imposter scams of all kinds have really taken off in the last year. She theorizes that a lot of people are behind on paying their taxes and don’t realize that the IRS does not call people asking them to send money.

“There is an alarming trend. It has gotten to the point that if someone is saying they are from a government agency, or your utility, or it’s your boss, you really don’t know whether in fact that is true. You need to be skeptical and check directly with whom they purport to represent before you send any money or give information,” Grant said.

In a new type of imposter scam, crooks infiltrate companies’ or organizations’ email systems and send messages purporting to be from the CEOs to employees with urgent instructions to wire money somewhere.

Tax and wage-related fraud were the most common forms of identity theft reported to the Federal Trade Commission last year, so it’s no surprise that tax ID theft was one of the fastest-growing complaints to state and local consumer agencies, the report says.

Aggressive sales tactics for solar power and electricity seem to be at the root of energy services comlais.

“Consumers are misled about the potential savings, locked into long-term contracts, and in some cases, discover that their service has been switched to another complaint without their consent,” the report states.

The top 10 complaints received last year by agencies participating in the CFA survey were automotive, home improvement/construction, utilities, credit/debt, retail sales, services, landlord/tenant, household goods, health products/services and Internet sales.