#319 Look out for tax scams this EOFY

8 July 2021

Imagine if your mobile phone rang and somebody claiming to be from the Australian Tax Office (ATO) began threatening you with dire consequences over non-payment of a tax debt you didn’t even know you had.

If this were to happen, you’d be the potential subject of what the Australian Competition and Consumer Commission (ACCC) calls a ‘targeting scam’. Targeting scams involve unsolicited emails, text or phone messages that convey promises, threats or both.

In 2020, the ACCC reported that more than $851 million was stolen from Australians in over 440,000 scamming incidents. This was a record loss, which the ACCC said was due to scammers taking advantage of the COVID-19 pandemic. 

Not all targeting scams follow the threat-based model. Other scammers will convince individuals they can make a large profit on a ‘sure thing’ investment. But this opportunity is not possible unless bank details are provided upfront by the targeted individual, or a down payment is immediately made by them. 

Another common scam is ‘payment redirection’ where scammers impersonate a real business, via email, and demand a payment owed to the business, but then trick the victim into sending it to a fraudulent account.

The key to these scams is the false identities that fraudsters use to pose as government officials, bank officers and legitimate business people.

Tax time is also scam time

There’s generally a sharp rise in threat-based scams involving tax issues during the end of financial year period. Unfortunately, as you’re reading these words, fraudsters claiming to be ATO officials are contacting thousands of people with threats of fines or criminal prosecution over non-existent tax debts. 

Or, as happened in February 2021, scammers pretending to be from the ATO persuaded people to transfer money into a fraudulent bank account by threatening to suspend their tax file numbers. 

These scammers use sophisticated psychological marketing techniques to lure people into handing over their money. The strategies they employ are tailored to trigger emotional responses, either fear or greed, that bypass rational thought. 

If you’re contacted by somebody with a personal request or warning about your tax status, don’t react and take a few seconds to evaluate the situation. Then end the phone call or delete the message or email.

If you are concerned about the call or message, please call us.

How to keep fraudsters’ hands out of your pocket

How can you avoid falling victim to fraud schemes? We have a few simple rules that can help keep your money safe.

  1. Be aware that while the ATO does contact taxpayers by phone, there will always be a live person on the other end of the line. Pre-recorded phone messages are a definite red flag for fraud. 
  2. Legitimate phone calls and text messages from the ATO will never include demands for immediate payment to avoid imminent arrest or threats to cancel your tax file number. Threatening messages like these are clear indications that you are the intended victim of a targeting scam.
  3. Another clear indication of fraud is a demand for payment by unusual methods such as cryptocurrency, gift cards or a money transfer company. Anyone asking to be paid by bitcoin, Apple Gift Card or Western Union money transfer is definitely a fraudster who is trying to steal from you. 
  4. Take care if you receive emails or social media messages containing hyperlinks. Do not click on them, even if they appear to be from the Australian Government or a company you know. 

What to do if you’re targeted?

It is recommended that you immediately contact your Bongiorno tax adviser if you’re scammed or think you have been. If we are not your tax adviser or you don’t have a tax one, then you should phone the ATO direct.

It’s important to avoid falling victim to a targeting scam because once your money is gone, it’s difficult to retrieve. A standard operating procedure for these fraudsters is to transfer stolen money into offshore bank accounts where recovery is almost impossible. 

It’s sometimes possible to stop payments made by a bank or credit card if you move quickly enough. But we’re talking about just a few hours, as once a payment leaves your bank and lands in a scammer’s account it’s extremely unlikely that you’ll see your money again. For this reason, prevention is key when it comes to targeting scams. 

Many people find tax time a stressful experience. Be aware that while you’re assembling your financial records and talking to your tax adviser, there are fraudsters working to exploit your stress. Tax time is high season for these scammers and they may contact you by phone, text message or email. They sometimes rely on information collected about you to make their approach more convincing.

Safeguard what’s rightfully yours

With knowledge and common sense, you can protect your income and savings from scammers. The ATO provides information and advice on scammers, and the ACCC posts annual reports on scam activity that inform and update Australians. The ACCC also publishes Scamwatch, which provides information about recognising, avoiding and reporting scams.

For more information or to book an exclusive AMA Victoria member complimentary meeting, please phone (03) 9863 3111 or email amav@bongiorno.com.au.

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