Don't Lose Your Investments To Scammers: Understand The Infamous IRS Scheme

Posted on: 10 December 2016


This year, the United States has arrested numerous people involved in a phone scam that actually crosses international borders. In fact, the IRS scam has become infamous in recent months, but the federal government has been looking into the scheme for years. Is it possible you could lose your investments to scammers? If you understand how the scam works, you do not have to.

How Does the Scam Work?

For the victim, it all starts with a phone call from a worker in an Indian call center pretending to work for the IRS. Over the course of the phone call, the call center worker will begin to threaten jail time and other consequences if the victim fails to pay the IRS money owed.

First, the scammers involved in the scheme will buy data that includes your information. These call lists are passed on to call centers. These are the people who call you. They threaten you until you agree to pay the so-called IRS with prepaid debit cards. Unfortunately, you are not actually paying the IRS in doing so.

The scam works by using two different types of victims. Of course, you first have the people who are scammed out of money, often thousands upon thousands in investments. Then, you have those whose identities are stolen in order to register prepaid debit cards. The cards are used to move the money, some of which will end up in some underground banking system. This makes it easy to hide the money and avoid detection.

How to Spot the IRS Scam

One of the first things you should know about the IRS is that they typically do not call to alert you to tax debt. You will receive an official letter from the IRS if you owe money on your taxes. Additionally, the IRS will never require that you pay your taxes in a specific way, such as sending in prepaid debit cards. The IRS will also not ask for your debit or credit card number via phone. These are all indicators that you are talking to a scammer.

What Can Victims and Potential Victims Do?

Unfortunately, it is unlikely that the victims will receive their money back. It is a good idea to speak out about the scam though, ensuring that those you know are not so likely to fall prey to the scam. It is not worth falling for this scam and losing your investments. For more information about investments, contact a company like King of All Trades.