Monday, August 20, 2007

Online Scammers Invoke Government Agencies

Last week I received an unsolicited email message, which purported to be from the Internal Revenue Service, offering me a modest refund. I knew that it was not genuine. It was a scam, a con, a blatant attempt at "phishing".

These anonymous scammers not only invoke the name of the IRS as bait for their victims. They also invoke the names of Medicare, state agencies, and local governments to attract interest to their broadcast impersonal messages.

They hope to catch a trusting, but unsophisticated, responder. Once "on the hook", the responder might volunteer sensitive information or account numbers that would enable Internet theft with no trail for law enforcement to follow.

This is the text of the "income tax refund" message that I received, which bore an official-looking logo. My email filter properly categorized it as "junk mail" or "spam":

After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of $109.30.

Please submit the tax refund request and allow us 6-9 days in order to process it.

A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline.

To access the form for your tax refund, please click her [link removed]

Internal Revenue Service

© Copyright 2007, Internal Revenue Service U.S.A..
It was clear to me -- beginning with the "copyright" notice on the communication -- that this was a fraud. I have become sensitized to it; and I have attempted to inform others. See: PA EE&F Law Blog postings SEC's Senior Investor Protection Seminar on May 18 (05/07/07); Beware Email Bearing Benefits! (01/10/07); PA AG Speaks to Seniors about Scams (09/22/06); and PA Bar Assn Prepares Public Education Campaign on "Personal Identity Theft" (09/01/06).

But it was clear to other attorneys, too, who received similar messages recently, and then reported them on an American Bar Association listserv as a reminder.

Do folks really respond to such messages? Apparently, some do, despite warnings; and the financial consequences can be personally devastating.

The Internal Revenue Service had posted a warning about such email scams nearly two years ago. See: "IRS Warns of e-Mail Scam about Tax Refunds", dated November 30, 2005.
The Internal Revenue Service today issued a consumer alert about an Internet scam in which consumers receive an e-mail informing them of a tax refund. The e-mail, which claims to be from the IRS, directs the consumer to a link that requests personal information, such as Social Security number and credit card information.

This scheme is an attempt to trick the e-mail recipients into disclosing their personal and financial data. The practice is called “phishing” for information.

The information fraudulently obtained is then used to steal the taxpayer’s identity and financial assets. Generally, identity thieves use someone’s personal data to steal his or her financial accounts, run up charges on the victim’s existing credit cards, apply for new loans, credit cards, services or benefits in the victim’s name and even file fraudulent tax returns.

The bogus e-mail, which claims to come from "" tells the recipient that he or she is eligible to receive a tax refund for a given amount. It then says that, to access a form for the tax refund, the recipient must use a link contained in the e-mail. The link then asks for the personal and financial information.

The IRS does not ask for personal identifying or financial information via unsolicited e-mail. Additionally, taxpayers do not have to complete a special form to obtain a refund. * * *

The IRS isn't the only governmental agency impersonated by scammers.

The Medicare Program is also impersonated with growing frequency. Medicare scams have been the subject of warnings from the Centers for Medicare and Medicaid Services, as reported by The Boston Globe in an article entitled "US issues Medicare scam alert Perpetrators tricking elders into giving up bank data on phone, dated June 17, 2006, by Jeffrey Krasner.

Alerts have been issued by many organizations, as evidenced by online bulletins posted by the Federal Trade Commission, the National Association of Insurance Commissioners, the Attorney General's Office in Michigan, the Attorney General's Office in Arizona, and the Attorney General's Office in Florida, just to name a few.

Pennsylvanians are targets too. The article "
Phone scam targets Medicare recipients", posted on July 13, 2007, by Elizabeth Gibson on Penn-Live (Harrisburg, PA), reported recent attempts by con-criminals hiding behind a false Medicare persona.
People who use Medicare are being targeted in a telephone scam that surfaced in Cumberland County today.

Callers, claiming to work for the government's health insurer for senior citizens, insist they must issue a second Medicare card. All that's needed, the caller insists, is a senior's bank account information.

Hogwash, says Barbara Hocking, a Cumberland County Aging and Community Services officer. * *

"The scary part is, these people who prey on the elderly know exactly which buttons to push," said Robert Burns, director of Dauphin County Area Agency on Aging. "A lot of older people are trusting. They grew up in a different world than we are in," Hocking said. * * *

This trusting nature, with a touch of loneliness, makes some senior citizens perfect targets for scammers, according to an article entitled "Data miners swindle the lonely and elderly", by Charles Duhigg, published May 20, 2007.

The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.

Then, the criminals emptied their victims' bank accounts. * * *
Pennsylvanians indeed are attractive targets for criminals with a "con" to foist, according to the article "Western Pa. scammers who prey on elderly targeted", posted May 13, 2007, by Jason Cato, of the Pittsburgh Tribune-Review.

Pennsylvania is ripe with seniors, and seniors are ripe targets for con men, legal experts say. Swindlers know the elderly are often flush with savings and other assets, such as real estate and investments, experts say.

State and federal prosecutors are working to make seniors less of a target. Their efforts have attracted national notice.

"In Pennsylvania, particularly, they've gone a long way toward getting the expertise and resources to seek justice against people who perpetrate these crimes against older people." said Sara Aravanis, director of the National Center for Elder Abuse.

"There are major efforts under way to prosecute these egregious cases." * * *
The Pennsylvania Attorney General's Office stands in the forefront of efforts to prosecute Internet & phone crimes, such as those relating to a bogus "Medicare Drug Discount Card". The PA AG's website offers advice, both to prevent & to prosecute scammers.

Helpful also are the Federal Bureau of Investigation's explanation of telemarketing fraud and the website of the the National Consumers League Fraud Center.

Yet prevention remains the best tool against scammers. That tool, in your hands, is your email's "deleted" folder, or the cradle for your hung-up phone.