Q: A friend of mine recently received a very disturbing phone call from a person identifying themselves as an IRS agent. On the call, this supposed IRS agent threatened to arrest my friend if she didn’t immediately pay her back taxes. She followed his very detailed directions to send a MoneyGram for over $2,000. Is her money long gone? Is this a scam? If so, can you please warn others?
A: Your friend is not alone. According to government reports, to date about 5,000 people have now lost over $15 million to this IRS agent impersonation scam. They have already received close to a half million complaints from citizens. Clearly, this scam fools enough vulnerable people.
Rather than paraphrase the definitive source, the IRS has addressed this particular scam on their website. Here’s what they say;
“Note that the IRS will never: 1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill; 2) demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe; 3) require you to use a specific payment method for your taxes, such as a prepaid debit card; 4) ask for credit or debit card numbers over the phone; or 5) threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.”
The victims of this fraud do see the red flags, yet their common sense still fails them. For example, I’ve heard of cases where the victim knew to call their financial adviser or a relative before sending any money. However, the fraudster countered with intensified threats of imminent arrest if they hung up their phone. The perpetrators always have a well-rehearsed response.
I have personal experience with another fraud that involved my wife’s now-deceased grandmother. In her 90’s and amazingly on Facebook, she was contacted by a man impersonating her seriously-injured grandson stuck in a foreign hospital. Unable to reach other relatives – deftly name dropping some of her Facebook contacts – this fraudster convinced her to send over $1,000 to pay for his medical bills and a plane ticket home. Her own bank obliged, with far too few questions asked.
These predators need to be stopped, or at the very least, slowed. With our aging society and with technology that enables crooks to hide in plain sight, these scams will continue to grow. I call on regulators and our legislators to introduce additional “speed bumps” into the financial system. It’s a very small price to pay to protect the most vulnerable among us.
Until then – and I know it might be a long, long wait – I ask all readers who know of someone who might fall for such scams, particularly those with memory impairment, to pass along this column to both them and to their loved ones.
August 4, 2015 | Jason P. Tank, CFA
