IRS Issues Scam Alert on Fraudulent Callers Impersonating Debt Collection Agencies

The alert warns consumers of “criminals” posing as debt collectors working for the IRS. Legitimate debt collectors will not make such calls and are committed to helping consumers pay their rightfully owed debts in a manageable way. ACA International also has tips for working with consumers during tax season.

2/14/2018 11:00 AM

IRS Issues Scam Alert on Fraudulent Callers Impersonating Debt Collection Agencies

The Internal Revenue Service issued an alert Feb. 13 warning consumers of “criminals” posing as debt collectors working on behalf of the IRS as well as a notice of a quickly growing scam involving erroneous tax refunds being deposited into their accounts.

The alert on the collection calls serves as an important reminder of the distinction between legitimate debt collectors working on behalf of creditors and government agencies to help consumers and fraudulent actors.

The IRS also offered a step-by-step explanation for how to return the funds and avoid being scammed.

According to a news release from the IRS:

“Following up on a Security Summit alert issued Feb. 2, the IRS issued this additional warning about the new scheme after discovering more tax practitioners’ computer files have been breached. In addition, the number of potential taxpayer victims jumped from a few hundred to several thousand in just days. The IRS Criminal Investigation division continues its investigation into the scope and breadth of this scheme.

These criminals have a new twist on an old scam. After stealing client data from tax professionals and filing fraudulent tax returns, these criminals use the taxpayers' real bank accounts for the deposit.

Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.”

In one version of the collection call scam, “criminals posing as debt collection agency officials acting on behalf of the IRS contacted the taxpayers to say a refund was deposited in error, and they asked the taxpayers to forward the money to their collection agency,” according to the news release.

“In another version, the taxpayer who received the erroneous refund gets an automated call with a recorded voice saying he is from the IRS and threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security Number. The recorded voice gives the taxpayer a case number and a telephone number to call to return the refund,” the IRS reports.

As it did last week, the IRS repeated its call for tax professionals to step up security of sensitive client tax and financial files.

The IRS urged taxpayers to follow established procedures for returning an erroneous refund to the agency. The IRS also encouraged taxpayers to discuss the issue with their financial institutions because there may be a need to close bank accounts. Taxpayers receiving erroneous refunds also should contact their tax preparers immediately.

Legitimate debt collectors are not consumers’ enemies and are not interested in a debt that is not owed and it is illegal to make such threats as arrest or a lawsuit. By law, the collector must inform you of your right to dispute the debt and request written verification if requested. Once sought, all collection activity stops until this proof is provided.

ACA International also believes that it is important to clearly distinguish between illegal operations and scammers who have no intention of complying with the law and legitimate debt collectors who, despite making significant efforts to comply with the many numerous and complex regulations covering the industry, may inadvertently make compliance errors.

ACA International has several tips for collectors working with consumers during tax season in the February issue of Collector magazine.

Read more information on the erroneous refunds and fraudulent collection calls in the IRS news release.

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