IRS Braces for Scammer Onslaught Accompanying Stimulus Payments

The Internal Revenue Service is bracing for another epidemic -- scammers trying to get their hands on the $1,200 payments being sent out to millions of Americans to bolster the economy.

The payments, plus an additional $500 for each child, have begun hitting bank accounts this week, opening a wide avenue of opportunities for scams, identity theft and low-tech crimes such as stealing checks from mailboxes.

“Right now, due to how vulnerable the population is, it’s really prime picking for fraudsters to come out in full force,” Donna Parent, the chief marketing officer at Sontiq, a identity theft protection company, said. The Federal Trade Commission “is reporting more than $13 million in fraud loss due to COVID-19 -- that’s only going to exponentially increase with stimulus payment scams.”

The Internal Revenue Service and the Treasury Inspector General for Tax Administration, the agency’s watchdog, have already issued several warnings that scammers are posing as the IRS to try to get personal information from payment recipients that they can then use to steal the money. The inspector general is asking people to report any suspicious activity.

‘Unsuspecting Victims’

“I understand scammers are already contacting innocent Americans by impersonating IRS or Treasury Department officials, offering so-called COVID-19-related assistance that requires the sharing of personal financial information,” Senate Finance Committee Chairman Chuck Grassley wrote in a letter to the inspector general earlier this month. “These scammers then use that information to steal from their unsuspecting victims.”

The $1,200 payments are available to those earning less than $75,000 as an individual, including recipients of Social Security, disability and veterans benefits. Those earning above that threshold and up to $99,000 get a smaller payment.

People in that population, including the elderly, those with less education and those who aren’t tech savvy are the most likely to fall victim to some of these scams, and are also the most likely to need the money, said Vanita Pandey, the head of strategy at Arkose Labs, a company that detects and prevents online fraud.

Coronavirus means that a lot of people who weren’t familiar with the internet are now using apps to communicate with family and friends or ordering groceries online, giving scammers ample opportunity to find easy targets, Pandey said.