FTC Warns Consumers About Tax Rebate Scams

Crooks try to steal information over the phone

By Martin H. Bosworth
ConsumerAffairs.com

March 8, 2008    

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Now that tax returns are slowly making their way to the government and rebate checks will be winging their way to eager consumers' wallets, identity thieves and scammers are gearing up for a new round of hunting for vulnerable targets to bilk out of their financial rewards.

The Federal Trade Commission (FTC) has issued an alert warning consumers to avoid the latest form of fraud.

According to the FTC alert, identity thieves will call unsuspecting citizens pretending to be a representative of the Internal Revenue Service (IRS), the Social Security Administration (SSA), or another government agency.

The scammer will claim that the citizen needs to provide some kind of personally identifying information in order to process their rebate check, such as a Social Security number or bank account number.

Fraudsters may also use official-seeming emails to "phish" for consumers who may submit their personal data to what they think is a government Web site, but is in fact a fake, or which may install spyware or keylogger programs on the unsuspecting consumer's computer.

"Neither the IRS nor the SSA collects information about government rebate qualifications by telephone or email," the FTC said. "The FTC urges consumers who are contacted by phone or e-mail not to provide any personal information and to report the contact to the IRS at phishing@irs.gov or the SSA at 1-800-772-1213."

The IRS issued a similar alert in January reminding citizens that the agency does not send unsolicited emails containing tax information to anyone. The IRS also urged anyone who received a phishing email to forward it to phishing@irs.gov in addition to notifying the agency about the scam.

Using the phone to con victims into releasing personal data, a technique called "vishing," is one of the newest forms of identity theft. Vishing is rapidly eclipsing other forms of information gathering as the leading means of thieves to steal victims' data.

Although industry studies such as those conducted by Javelin Research & Strategy have claimed that identity theft has been on the decline in recent years, research indicated that there was a pronounced jump in the usage of "vishing" to get personal data, increasing from 3 percent in 2006 to 40 percent in 2007.

Identity theft has topped the FTC's consumer fraud complaint list for the better part of a decade. In 2007 alone, of 813,899 total complaints received in 2007, 258,427, or 32 percent, were related to identity theft. Total losses from consumer fraud totaled $1.2 billion for 2007, with the average monetary loss for an individual at $349.

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