There’s a New Scam in Town!

Last week I received a call from a client who was panicked after receiving a call from an IRS agent saying he owed taxes and must pay immediately or face having his bank account frozen or potentially have his home seized.  When my client didn’t immediately agree to pay the taxes due, the agent demanded the name and phone number of my client’s attorney.  This agent was very aggressive and threatening.  It all sounded awfully suspicious to me so I called the number he left and there was no such number.

As it turns out, this is a scam that has been going around for some time and is apparently very effective.  The scammers like to prey on immigrants (this client is Korean) and often include threats of deportation.  Some of the scammers pose as agents of the U.S. Treasury Department and in some cases, if they don’t get money with the first call, they’ll have someone else call back pretending to be with the police department and state that an arrest warrant has been issued and the only way for you to avoid arrest is to pay the outstanding taxes.  Their preferred method of collecting is for you to provide them a debit card account number with your PIN.  In other cases they’ll ‘accept’ a credit card or request you wire them the money.  Fall for this scam and you can kiss your hard-earned money good-bye.

According to the U.S. Treasury Department, this is the largest scam they have encountered.  Some con artist are even using Robo-calling to mass market the scam.  The recorded message says that you must call the number they give you or face dire consequences.

First, the IRS does not make calls demanding immediate payment so if you get an ‘official-sounding’ call like this, ask for a case number; hang up; then call the IRS directly at 800 829-1040 and ask to speak with an agent.  Once it’s clear that it’s a scam, call your state’s Attorney General’s office and report the incident.  There may not be much the Attorney General can do but he or she can alert the community.

How not to become a victim

While this is a recent and prolific scam, it’s obviously not the only one going around.  Scams come in a rainbow of shapes and sizes.  I’m sure you have received one of the emails from Nigeria stating that a long-lost relative has died and left you $5 million.  If you’ll just send the Nigerian Minister of Treasury a small fee you’ll receive your financial windfall!  It’s hard to imagine that anyone would fall for such a pitch but clearly some folks do.  Here are a few tips to avoid becoming a victim of a scam:

  • “If it sounds too good to be true, it is.”  This age-old adage is worth remembering.
  • Never give money to someone you don’t know no matter how good the deal sounds or how ‘time-sensitive’ the offer is.
  • Never give account information to someone you don’t know.  Be extremely careful about giving credit card information over the Internet when making purchases.  Some scammers set up web sites that look like the real thing using legitimate companies official logos (copying and pasting a logo is very easy!).  If you get an email offer from what looks like a legit retailer with a ‘click-on’ request, close the email and go directly to the store’s web site or call to place your order.
  • Protect your parents.  Scammers like to target the most vulnerable of our society- the elderly.  You need to determine how vulnerable your parents are and the best approach to protecting them.  In one case we set up an irrevocable trust and transferred all the father’s assets into the trust with the son as the trustee.  The son funds a small checking account that the father uses to pay basic bills and personal expenses.  This may not prevent him from writing a check to a scam artist but it will limit the financial exposure.  Immigrants, particularly illegal immigrants are favorite targets of con artists especially when it comes to extortion-style schemes. 

In a world where cyber-crime is becoming more and more prevalent and sophisticated, each of us must constantly remain vigil to attacks on all fronts.  Monitor closely all of your financial accounts and scrutinize any suspicious activity…and “No, you didn’t just inherit $5 million from a long-lost relative from Nigeria!”