Call Center in India Busted for IRS Collection Fraud

irs-logoNaked Security recently reported on the raid on a call center outside of Mumbai India that was engaged in defrauding US taxpayers of over $15 million dollars by pretending to be IRS collection agents.  70 people were arrested and over 600 call center operators remain under investigation.  While this is good news, this scam was very successful and is likely to pop up again.  We are reporting on it here to warn you about this exploit and help you avoid falling victim to this scam when they call you.

The basic ploy was to call people and threaten them with the possibility of immanent arrest (“in the next two hours!”) and encouraging them to pay their taxes by bank electronic funds transfer or even with gift cards.  Typical amounts were $4000, $5000, and $10,000.  People without the ability to pay these amounts were told to pay what they could.  Some people were encouraged to stay on the call while they went to Walmart or Target to buy iTunes gift cards worth thousands of dollars.  The perpetrators spoofed the caller ID so it looked like the calls were originating inside the United States.  Many of the call center personnel had been coached to speak with a “more American sounding” accent.

The IRS website advises taxpayers what to do about phone and email scams.

The IRS will never:

  • Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do:

If you don’t owe taxes, or have no reason to think that you do:

  • Do not give out any information. Hang up immediately.
  • Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
  • Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

If you know you owe, or think you may owe tax:

  • Call the IRS at 800-829-1040. IRS workers can help you.

Also, be on the lookout for similar scams showing up in your email inbox.  These scammers prey on the trust, gullibility, and fear of their victims.  I advise people that one of the clues that you are being scammed, whether by phone or email, is to check your emotional state.  If you are feeling panicked, fearful, confused, or angry, then what is happening is probably a scam.  Hang up or disengage, and wait for sanity and calmness to return before doing anything.  Then call the IRS yourself at the number above and check it out yourself.

More information:

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About the Author:

Cybersecurity guru to business owners in the St Paul, Minneapolis, and western Wisconsin area. Computer security and hacking have been a passion of mine since I entered the computer and networking business in 2000. In 2013 I completed a course of study and certification exam to become a Certified Ethical Hacker (CEH). In 2016 I was certified as a Certified Information Systems Security Professional (CISSP). As Senior Cybersecurity Engineer at Computer Integration Technologies, I help our clients experience high levels of computer security, network security, and web site security. In addition to consulting on security products and services, we also conduct security audits, vulnerability assessments and full penetration tests. We also provide Cybersecurity Awareness Training for clients and their employees. We also work with companies and organizations that need to certify compliance with regulations such as PCI-DSS (credit card processing), HIPAA/HITECH (medical records), and GLBA. The views expressed on this Web site are mine alone and do not necessarily represent the views of my employer.
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