With taxes due soon, consumers are being targeted with tax scams, which have been making the bad guys big bucks.
According to news from CNBC, the Treasury Department said more than 10,000 tax scam victims have paid in excess of $54 million via phone scams perpetrated since October 2013, with many using iTunes gift cards to pay up. The scam has been so successful that the Treasury Department had to issue an alert recently, stating, “Any caller requesting taxpayers place funds on iTunes gift cards or other prepaid cards to pay taxes or fees is an indicator or fraudulent activity.”
Victims of this scam receive a phone call urging them to pay their back taxes via an iTunes gift card. Once the gift card is purchased, the victim is asked to provide the 16-digit code on back of the gift card. This all takes place over the phone, with the bad guy getting access to the money loaded onto the gift card. Using iTunes gift cards is appealing to scammers because it’s hard to track where the cash is used after the gift card is spent. It’s also hard for victims to get their money back even if they recognize the ruse, noted CNBC.
While tax scams increase around tax time, CNBC noted the IRS is warning that IRS impersonation scams happen throughout the year and peak when fraudsters find the best times to unleash their scams. They often are aggressive and use threatening phone calls while pretending to be IRS agents.
When it comes to fraud victims, millennials are lose money to fraud more often than senior citizens. But when older adults do become financial victims, they typically take a bigger hit than millennials do, the Federal Trade Commission (FTC) said in a recent press release. Forty percent of those aged 20-29 who reported fraud indicated they lost money, while only 18 percent of those 70 and older said they lost funds. But those aged 80 and older lost more than double millennial victims, with a median loss of $1,092 compared to $400 for those aged 20 to 29. Overall, the FTC reported consumers lost more money due to fraud in 2017 than 2016.