As tax season gets underway, the Federal Trade Commission (FTC) is issuing a new warning about evolving identity theft scams, urging taxpayers to stay alert and informed. This advisory is part of an education campaign during Identity Theft Awareness Week.
Last year alone, the FTC reported that more than a million victims lost over $10 billion combined due to identity theft. Kelle Slaughter, a Senior Investigator with the FTC office in Dallas, emphasized that scammers are adapting their strategies. They are moving beyond traditional phone calls and are now increasingly employing text messages and emails to steal personal information.
“These text messages include statements like, ‘How to get your tax refund’ or ‘Here’s information about a tax rebate,’” Slaughter explained. “They lead to fake IRS websites where scammers capture your login details, or worse, install malware on your devices.”
Slaughter described a recent text message received by a member of the NBC 5 team, which falsely claimed to be from the Internal Revenue Service and offered bonus money. The text contained a link to a fake website designed to steal personal information.
“The unfortunate part of it is that sometimes when you click the link in these text messages, they lead you to a fake website that looks exactly like the IRS website. And when you log in with your username and password for that website, the scammer is capturing that information,” she said. “There may be questions that the scammer will ask on this fake website that may actually be answers to your security passwords on other platforms.”
The FTC strongly advises taxpayers to avoid clicking on any links in unsolicited text messages or emails. Instead, the agency recommends visiting IRS.gov directly to obtain and verify information about tax refunds or rebates.
Impersonation schemes are also on the rise. Scammers are attempting to pose as the FTC, using the agency’s name to trick individuals. The official FTC Consumer Advice site clearly states, “The FTC will never threaten you, say you must transfer your money to “protect it,” or tell you to withdraw cash or buy gold and give it to someone. That’s a scam. Report it.” The site offers several helpful articles about detecting and avoiding these scams.
Steps to Protect Yourself
Slaughter outlined several proactive steps people can take to protect their personal and financial information:
- Freeze Your Credit: Freezing your credit with Experian, Equifax, and TransUnion can prevent scammers from opening new accounts in your name. This service is free and can be easily unfrozen when needed.
- Use Strong Passwords & Multi-Factor Authentication: This added security measure can significantly reduce the likelihood of thieves accessing financial and social media accounts, even if they possess your login details.
- Beware of Unsolicited Communications: If you receive unsolicited calls, text messages, or emails from someone claiming to represent the IRS or any other government agency, do not engage. Instead, contact the agency directly using a verified phone number. The IRS will never request your Social Security number or other sensitive information over the phone. Typically, the IRS communicates with taxpayers through physical mail delivered by the U.S. Postal Service.
- File Taxes Early: Filing your taxes early can reduce your risk of tax-related identity theft. This proactive approach can thwart scammers who may attempt to use stolen information to file fraudulent returns.
- Use an IRS PIN: The IRS offers an Identity Protection PIN (IP PIN), a six-digit number designed to verify your identity during tax filing. This additional safeguard helps prevent someone else from filing a fraudulent return using your information.
Every year, the FTC analyzes consumer complaints, and identity theft continues as a top concern. In its 2023 Data Book, the FTC reported that impersonation scams and identity theft were the most frequently reported categories of consumer complaints nationwide.
Scammers are increasingly targeting children, whose Social Security numbers can be compromised in data breaches and misused for years before the fraud is detected. Slaughter recommends that parents consider freezing their children’s credit to prevent potential financial harm.
“By the time a child turns 18, they could already have terrible credit due to fraud,” she cautioned. “Unfortunately, we’re living in a day and age where we’ve experienced data breaches in schools. And a child’s Social Security number may be exposed and sold to other scammers.”
What to Do if You’re a Victim
If you suspect you have been targeted by a tax-related scam, the FTC advises reporting it immediately. To file a report, visit [this link instead of the original one]. You can also visit IdentityTheft.gov for detailed guidance on how to recover from identity theft.
“It is extremely important that people should report identity theft. Don’t be embarrassed about it. It is a universal problem that we all have no matter where you are,” Slaughter said. “When people report identity theft to the FTC, we share those reports with other law enforcement agencies that have the authority to investigate and take action. Law enforcement is also analyzing those reports to determine how to shut down the scammers. It helps us to develop our casework.”
For additional information on protecting yourself from scams during this tax season, visit FTC.gov or IRS.gov.
