News Insights: Latest tax scam holds your info for ransom. Here’s how to spot it and other fraud

Fraudsters want your Social Security number and other information to file fake tax returns as early as they can to steal tax refunds.

Latest tax scam holds your info for ransom. Here’s how to spot it and other fraud

Last week tax season, or peak scam season, began as millions of Americans could begin to e-file their taxes. The IRS states there were 649,000 confirmed fraudulent returns attempted to obtain $3.1 billion in refunds in 2018. Cybercriminals have already launched a phishing campaign this year targeting ADP users telling them their W-2 forms are ready and prompting them to click a malicious link.

News Insights:

James Carder, Chief Security Officer & Vice President, LogRhythm

“There are criminal organizations around the world that do nothing but commit tax fraud. The key to their business model is to submit as many fraudulent claims as soon as possible — hoping they beat the legitimate filer to the punch so they can redirect the deposit to a bank account they own.

With more than eight billion records exposed in 2019, it’s very likely cyber criminals already have the personal data necessary to impersonate a lot people. If they don’t have the information needed, they’ll probably launch a phishing attack to steal remaining details. In fact, the IRS has reported phishing as one of the most common forms of scam during tax season. And unfortunately, criminals don’t require that much of your personal information. They don’t even need your W2. Many attackers will fake W2 information, such as income, while being careful that the amounts aren’t suspicious enough to be flagged.

Ultimately, anyone can be susceptible to tax fraud — no matter who you are, what your job is, or what salary you make — and unfortunately, the only time a person finds out that they’ve been frauded is when their return gets subsequently rejected at filing. Because of this, it behooves people to file as soon as possible and to be extra cautious of calls, emails, or other messages asking for personal details.

And for an extra layer of security, individuals can request tax pin number to use as a secondary factor of authentication when filing returns. Those that have experienced fraud in the past automatically receive a pin from the government and can attest to the fact that it’s a long and arduous process to recover from. It can easily take a year to resolve and recover from tax fraud, so in addition to costing victims their money, it also costs them their time.”