They’re Still Scammin’, Yeah Yeah Yeah…

We’re three weeks into February, and that can only mean one thing. We’ve got taxes on our minds. If you’ve already filed, that’s great! Filing taxes early helps prevent tax return fraud. What’s that? You didn’t know about tax return fraud was? Well, you’ve come to the right place, friends. Sit back and relax because I’m about to fill you in on this popular scam. I’ll also talk to you about Cyber Attacks because let’s face it, fraudsters are becoming increasingly more tech-savvy.

What is Tax Return Fraud?

Fraudsters use your information to file a return before you can. The refund that you have been dreaming about is deposited into another account while you are left to deal with the aftermath. Think this can’t happen to you? Think again. Nearly 39,000 people made a report of identity theft for tax fraud in 2018. What’s worse? Once it happens, there is no quick fix. You will have to work with the IRS directly to get it fixed. During the busy tax season, you can bet this takes some time.

Another way scammers can commit tax fraud is by filing a return, depositing the refund in your account and contacting you posing as a collector or IRS official to reclaim the money they say was deposited in error.

An ounce of prevention…

Want to know what you can do to prevent yourself from becoming a tax scam victim? Keep abreast of common scams, and follow these tips:

• Don’t wait to file your taxes. As soon as you have all of your necessary documents, file your return!

• Use a trusted tax professional. Remember tax preparation sites can be hacked (since they are a third-party merchant), do your research and verify that your information is secure.

• Look for the lock symbol or HTTPS (the S stands for secure).

• Sign up for Fraud Alerts and Purchase Alerts to stay on top of your account. Be sure to check with your other providers for their services. There is no such thing as too much protection.

How are scammers getting their information?

Fraudsters are opportunists. They get their information from a variety of sources. They may spoof websites, hack your email, skim data, or use the dark web. One unique and new way that scammers are taking advantage of people through Cyber Attacks is by exploiting third-party services. Financial aggregation services, such as Mint and QuickBooks, store a wealth of data about your money and provide scammers a window of opportunity into your personal finances. Compounding this issue is that many users use the same password for everything (or at the very least, they use a similar password). Once a hacker has access to one password, they can attempt to use it in other places. It doesn’t take them long to automate the login attempts.

If you reuse passwords or use a variation of the same password, you’ve unknowingly made it easier for scammers to use that information against you.

Password Tips

Variety is the spice of life

Use different passwords for your accounts. It’s not always the most convenient approach, but it’s far more convenient than having your identity stolen and recovering what’s rightfully yours.

Change your Status to: It’s Complicated  

Complex passwords are your friend. Looking for an easy way to remember a complicated password? I’ll let you in on a secret. Think of a phrase that means something to you or is easy to remember. Swap out the letters with symbols or numbers. Take this one, for example, Eye<3p@$sW0r|)s. Can you tell what I was saying? It was, I love passwords. I - Eye <3 = Notice the shape of a heart? Passwords = Here, I’ve swapped out several of the letters with symbols.

Is that too difficult? You could always try this method:

Think of another phrase that would be easy to remember, but hard to guess. Use the first letter of every word in your chosen phrase as the characters in your password. Toss in a few numbers or a symbol and you are good to go. Need an example? How about Altaiagffa*3? That’s a secure password; it’s hard to guess, and easy to remember (if you’re a Star Wars fan.)

Altaiagffa = A Long Time Ago, In A Galaxy Far Far Away * = Star (Wars) 3 = (episode) 3

Sharing is Caring

…but not when it comes to passwords. Keep your passwords secure and never give anyone access to your accounts. Not only are you handing over control to that person, but you’re putting your information at risk.

If your password has been stolen, change it across other accounts as well. It’s better to assume that if one person has it, everyone else does, too.

Well, you did it. You’ve reached the end of another post. See, it wasn’t so bad, right? You might have even learned something. If you have any other password tips or thoughts on Tax Scams, I want to hear from you! You can comment below, or email me!

Krista Kyte is a personal finance blogger and personal banker with over 17 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that will help consumers reach and maintain financial security, and start living the life they’ve always wanted.