In the last six years, nearly 15,000 people have lost a total of more than $72 million on IRS phone scams. While these scams vary in approach, they typically threaten people with immediate arrest unless the victim pays the caller quickly using a wire transfer, gift card, or prepaid debit card.
IRS scams have historically been one of the most common tactics used by phone scammers. However, scammers are using a new tactic this year, one that involves the victim's Social Security information. In fact, according to FTC complaint data and information from background check provider BeenVerified, reports of Social Security scams increased by a factor of 23 in the first six months of 2019.
In April, the FTC revealed that $6.7 million in reported losses were recorded in the previous two months alone, with the scam targeting all age groups. Actual losses were undoubtedly higher since many people do not report that they have been scammed.
Like the IRS scam, victims are often instructed to pay with gift cards, but other forms of payment like bitcoin and putting cash into bitcoin ATMs have also been used. The approach is somewhat similar to the IRS scam as well.
Scammers frequently utilize official-sounding language, badge numbers, and fictitious lawsuits to intimidate victims into paying quickly.
BeenVerified provided the following example:
"This message is from the legal department of the Social Security Administration. My federal badge ID is SSA 456. The purpose of this call is regarding an enforcement action, which has been executed by the U.S. Treasury against your Social Security number."
While only 3.4% of people who report an attempted phone scam actually fall for it, the median amount of damages is $1,500. According to the FTC, this is four times higher than the median individual loss for all frauds.
Given the prevalence and long history of the IRS phone scam, together with public education efforts undertaken by the IRS, more people today understand that the IRS would never call and demand immediate payment for anything. This development accounts, in part, for phone scammers changing their tactics and focusing on the Social Security scam. It is important for people to understand that the Social Security Administration will not use a recorded message to demand immediate payment, threaten a lawsuit, suspend one's Social Security number, and other nefarious, fraudulent claims. If you receive such a call, ignore it. Or better yet, report it.