How to stop con artists in their tracks
If you’ve been receiving messages by phone, email, or text message from someone claiming to be from the Canada Revenue Agency, saying that you have overdue taxes and that legal action will be taken unless you pay immediately, you may be the target of a tax extortion scam. Here’s a look at how this widespread fraud attempt works, and how to make sure you don’t fall victim to it.
A sure sign it’s not the CRA calling
First of all, the most important thing to remember is that the Canada Revenue Agency (CRA) has specific protocols in place when contacting taxpayers. Leaving a recorded message or sending an e-mail or text demanding money or threatening legal action are definitely not part of those protocols.
You have been subjected to one of several telephone tax scams that are currently being perpetrated on Canadians. They may also take the form of an e-mail communication or a text message to your phone.
The Canada Revenue Agency simply does not operate this way.
Fraud is a criminal offence
These sorts of messages originate offshore, with criminal organizations located in India, China, Russia and other countries in the former Soviet Union and Eastern Europe.
According to Sgt. Al Boulianne, the RCMP officer in charge of the Canadian Anti-Fraud Centre, the RCMP receives “hundreds of calls daily from Canadians who suspect that they are being targeted by scammers, and even some who have lost money.” The Better Business Bureau says that just over $61 million was lost to scams in 2015 – and that’s only the amount that was reported. Many victims are too embarrassed to report their loss.
This particular tax scam is formally known by law enforcement authorities as an Extortion Scam, because it involves a threat of some kind. The call often appears to originate from a legitimate toll-free CRA number (a technique called “spoofing” that is designed to camouflage the caller’s true identity on call-display-equipped phones).
The callers (or recorded message, usually a robotic voice) identify themselves as some tax or law enforcement agent, citing a fake name, and even a “badge number.” They’ll ask you immediately to verify your name, address, age, and social insurance number. They’ll say you’ve been targeted in an audit and that you owe taxes, and demand that you pay up immediately, usually with a wire cash transfer or some other form of irrevocable payment. Failure to do so, they say, will result in immediate legal action and arrest. They supply a call-back number, often with a legitimate-looking area code (frequently the “613” Ottawa area code). The RCMP has reported that scammers have also threatened victims with bodily harm, kidnapping of family members, deportation, or arson for failure to comply.
How to handle scam calls
If you receive such a call, simply hang up. Never give any personal or financial information over the phone to someone you don’t know. And never call back on the number given. Ask yourself why the CRA would be asking for your social insurance number and other identity information – they already have that. If you still aren’t sure whether it’s a scam, hang up anyway, and call the Canada Revenue Agency back through their main toll-free number (1-800-959-8281) or check My Account online to see whether you owe money or are entitled to a refund.
The CRA warns taxpayers to be vigilant when they receive communication that claims to be from the Canada Revenue Agency, requesting personal information such as a social insurance number, credit card number, bank account number, or passport number. The Canada Revenue Agency will not do any of the following:
- Send email with a link and ask you to divulge personal or financial information.
- Ask for personal information of any kind by email or text message.
- Request payments by prepaid credit cards.
- Give taxpayer information to another person, unless formal authorization is provided by the taxpayer.
- Leave personal information on an answering machine.
Criminals are endlessly inventive in developing new ways to rip off unsuspecting victims. Our interconnected, wi-fi enabled world has opened up huge new vistas of scams, schemes, cons, and frauds for these lowlifes. Luckily, most attempts at tax scams are ridiculously amateurish and easily identifiable as scams right from the start. However, some are quite sophisticated, and can include call centres and polished spoof websites.
The Better Business Bureau offers three very good rules to follow if you get these types of calls:
- Hang up the phone immediately. Never engage the caller in any kind of conversation or debate.
- Delete any emails claiming to be from the CRA and asking for your social insurance number. And never click on any links embedded in such an email message or download any attachments.
- If you have any concerns about your taxes, call the CRA yourself through their main toll-free number.
Where to get help
Don’t become a victim! There’s much more very useful information on how to recognize and avoid these types of scams, and many others, at the federal government’s Canadian Anti-Fraud Centre website. Your financial advisor is also always an excellent source of information on CRA procedures and should be contacted if you have even the slightest doubt about the legitimacy of any approach made to you regarding taxes, investments, or estate planning.
© 2016 by Robyn K. Thompson. All rights reserved. Reproduction without permission is prohibited. This article is for information only and is not intended as personal investment or financial advice.