As part of Stay Smart Online week, The Australian Taxation Office (ATO) is guiding taxpayers with some simple measures to help protect themselves from scammers. It is important for taxpayers to remember to stay attentive and cautious of phone calls, emails, and text messages (SMS) during tax time that claim to be from the ATO, even if they seem legitimate.
These scams can be very convincing and many individuals fall victim to these each year. The ATO has confirmed scammers are predominantly active during tax time due to the large number of people lodging their tax returns. In 2014-15, 32,110 cases of identity theft were reported to the ATO. Of these, 22,200 were reported during the peak processing months from July to November.
The ATO has been working with a number of organisations including some major retailers and the Australian Competition and Consumer Commissioner to warn people about purchasing gift cards to pay for alleged tax debts, which some scammers have been requesting as form of payment.
The most common scams reported to the ATO are phone calls where a scammer will demand payment for a fake tax debt, or will email and request personal identifying information or a fee to release a tax refund. These scammers use a variety of techniques to try and legitimise the interaction such as ‘spoofing’ telephone numbers and replicating the ATO branding in emails.
To avoid becoming a victim of a scam, it is important that you are aware of the common characteristics:
- are unsolicited
- are pushy and can be intimidating, threatening arrests or penalties if payment for an unknown tax debt is not made immediately
- demand payment in full and in some instances via unconventional means such as iTunes cards, cash transfers or gift vouchers
- ask you for your personal or financial information or to confirm information they pretend they have
- are often poorly worded, containing spelling and grammatical mistakes
- may promise you a tax refund in exchange for a payment or personal information
- may contain an attachment or fake links requesting you to lodge a form – opening these attachments or links can cause you to download spyware or a virus.
In 2015 almost 87,000 phone and email scams were reported to the ATO, an increase of over 90 percent from 2014. From January to May this year, the ATO has received over 40,500 phone scam reports. Of these, 226 Australians handed over $1.2 million to fraudsters and over 1900 gave out some form of personal information, including tax file numbers.
An example of a tax scam is as follows:
You will receive an email claiming to be from the ATO, stating that your income tax refund had been recalculated and that you are entitled to an additional $250. All you have to do was click on a link in the email, provide some details, and you could expect the extra money in a few days.
Once you have completed the online form and click the print button, not only does it print out the claim form but it also unknowingly sends your full identity and credit card details electronically to an organised criminal syndicate, where it is then sold on the black market.
There are a few simple steps you can take to protect yourself from scammers, including only giving out personal details to people you trust and keeping tabs on your tax affairs so you know what you should be expecting. Also, as a general rule, you should be cautious about the personal information that you share, especially on social media.
Five simple ways to protect yourself from identity crime include:
1) Know what to protect: Personal information that is sought after by scammers including your full name, date of birth, current address, tax file number, bank account and credit card details, drivers licence and passport details, and any of your passwords.
2) Keep their personal information safe and secure: If personal information is stolen it can be very difficult to get back. It’s best to store things like a tax file number or birth certificate somewhere safe and secure – for example, don’t save it on your phone or carry it around in a wallet or handbag.
3) Do not share too much information on social media: Scammers can use information published on social networking sites to steal identities. If you see friends or family sharing personal information online, remind them that they could be putting themselves at risk of targeted attacks. It’s also a good idea to ensure online profiles are set to private and to be cautious about accepting friend requests.
4) Be suspicious of requests for personal information: If you receive a request for personal information, treat the request with caution. Scammers can be believable and will sometimes quote personal information to sound authentic, so consider the possibility that it may be a scam. To check if a call, email, SMS is actually from the ATO, you can call them on 1800 008 540 to confirm.
5) Know legitimate ways to make payments: Scammers may use intimidating tactics to get their victims into paying false tax debts with pre-paid gift cards or by sending money to non-ATO bank accounts. To check that a payment method is legitimate, the ATO list on their website all methods of accepted payment when dealing with them.
ATO was also warning on email scams back in 2013
The ATO warned taxpayers to protect their personal and financial details following an increase in reports of tax-related email scams. It said since June 2013 to September, reports of phishing scams have quadrupled to 15,441 compared to 3,586 during the same period last year, with the scams becoming more sophisticated. The Commissioner urged taxpayers to be vigilant of emails that mimic the ATO’s online publications especially those with links and attachments or those asking taxpayers to confirm or disclose confidential personal.
How to report a scam
If a scammer or someone claiming to be from the ATO calls you and you are unsure of their validity, you should:
- hang up immediately
- call the ATO’s dedicated scam reporting line 1800 008 540 between 8am–6pm EST, Monday to Friday.
For email scams you should:
- refrain from clicking on links or opening attachments
- forward the email to ReportEmailFraud@ato.gov.au
Source: Australian Taxation Office
Contact Solve Business Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.