How to Protect Yourself From Scams

I was walking out of the grocery store the other day, my daughter at my side, and my cell phone rings.  Juggling all my bags and purse, I manage to get my phone out “Hello?” The automated voice on the other end says “The IRS is trying to contact you regarding an urgent matter with your taxes.  Please press one now to speak with an IRS representative.”  Disgusted that I wasted the time and effort to answer the phone, I promptly hung up.  My daughter asks “Mom, who was that?”  “The IRS” I replied.  “Mom! The IRS will never try to contact you by phone!”  I told her that I knew that...and that’s why I hung up. I silently puffed my chest out a little bit with pride.  My 12-year-old knew it was a scam!

Scammers are everywhere waiting for the perfect opportunity to pounce…to catch you when you are at your most vulnerable.  Tax time is the perfect time:  everyone is edgy, leery about filing. 'Will I get a tax return or will I owe?'  Not to mention we’re inundated with companies advertising on TV saying they can settle your debts. And it must be true because it’s on TV, right? Well the truth is they can, but so can you…for FREE!

How do the scammers find you? 

• Phone numbers – Purchase of data from same providers that legitimate businesses use.
• “Sucker lists” – Con artists network and sell data back and forth. A great ploy is a “recovery scam” promising to recoup your losses.
• Freely given Info – Data provided when you enter sweepstakes, giveaways, etc.

So how do you protect yourself?

• DO NOT give them any information. Tell them you are NOT going to send them any money for something you won or that’s free.
• Never give money to anyone you do not know.
• ALWAYS investigate. NEVER agree to something verbally that you haven’t seen in writing and have verified as legitimate.
• Seek help from trusted resources. Anything these companies promise to do for you, you can do yourself without paying a fee.
• When in doubt, don’t give it out. Instead, contact these agencies directly using the contact information listed on their websites or in the tax booklets.
• Do not carry on a conversation with the caller. Instead, if you receive a call asking you to disclose your bank account or other financial information, hang up immediately. These are scam artists and by speaking with the callers, even to ask them to stop calling, they may be encouraged to continue calling your telephone number.

Here's where to report about scams/fraud:

• Minnesota Attorney General - 651-296-3353 or 800-657-3787
• Minnesota Department of Public Safety - 866-347-0911
• Consumer Financial Protection Bureau - 855-411-2370
• Federal Trade Commission's Identity Theft Hotline - 877-438-4338

There are rarely freebies without some sort of catch these days. And the old saying is typically accurate: if it sounds too good to be true, it usually is. So be cautious, safeguard your personal information, and don’t pay for a service that you can do yourself for free.

Check out this post about other tax related scams and this one on protecting yourself from identity theft.

Author Katie Eastman is a Certified Financial Counselor with LSS Financial Counseling.