As tax day quickly approaches in the United States, scammers are ramping up their efforts to swindle Americans out of their money. CNBC this week highlights a growing scheme that sees scammers asking people to pay their taxes with iTunes gift cards…
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While phone scams that ask people to pay taxes, credit card debt, hospital bills, and more via gift cards are nothing new, the Treasury Department this week specifically highlighted that iTunes gift cards are becoming the card of choice for scammers.
In a statement to CNBC, the Treasury Department said that more than 10,000 people have fallen victim to tax phone scams since October of 2013, losing a total of over $54 million. While not all of those scams involved using iTunes gift cards, the department specifically calls them out in its statement:
It may seem crazy, but the scams have been so successful that the Treasury Department was forced to issue a scam alert: “Any caller requesting taxpayers place funds on an iTunes gift cards or other prepaid cards to pay taxes or fees is an indicator or fraudulent activity,” it reads.
These scams work just like you would expect them to. The scammer makes a threatening phone call using words like “fraud,” “police,” “back taxes” and “arrests” and tells the victim that they must go purchase an iTunes gift card and then share the 16-digit code on the back.
CNBC’s Jim Pavia highlights his experience dealing with one of these scammers:
I played along with the IRS phone scammer who recently called me for as long as I could. However, there was no way I was able to contain my laughter when he instructed me to pay my “back taxes” by purchasing an iTunes gift card. I did “offer” to pay with my credit card, but the scammer said it was too late for that.
I was instructed to immediately buy an iTunes gift card and to stay on the phone the entire time; otherwise, “this final chance to avoid prison will disappear and the police will soon arrive and arrest” me.
The IRS also points out that it will never call and demand immediate paying using a specific payment method, nor will it threaten to immediately involve law enforcement.
- Call to demand immediate payment using a specific payment method, such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
Read more about how to protect yourself on the IRS website.