Introduction

On 4 December 2018, the consumer watchdog ACCC (Australian Competition & Consumer Commission) issued a warning about the significant rise of tax scams now before the festive season. A day later, the Australian Taxation Office also issued a similar warning, with over $800,000 reportedly lost by Australians during the month of November to tax scammers.

What are the features of tax scams?

Victims are contacted by a scammer pretending to be from the Australian Tax Office (ATO) or the police. Whether directly or through a robot voice, the victims are asked to contact a phone number, the scammer will (abusively, offensively or aggressively) ask for:

  • your name;
  • your tax file number;
  • payment of an outstanding tax debt;
  • money in order to receive a refund or other payment;
  • you to stay on the phone with them while you go to the bank, post office, or shops to make a payment.

The scammer will threaten issuing a warrant for your arrest or legal action if you do not comply.

The exact opposite may occur instead, offering you a tax refund, which is too good to be true. Other offers to ‘unlock’ your super early, or investments where you need to act quickly before an offer ends, are signs that an investment may not be legitimate.

Always check the details of these schemes with your registered tax agent or someone you trust. If something appears too good to be true, it probably is.

How are the scams delivered?

The ACCC noted most of the reported tax scams were delivered to the victims over the phone, followed by email. Please refer to pie chart below:

VIC Graph

How are you being scammed for your money?

The scammers will get their victims to ‘pay’ their tax debts or fines by:

  • purchasing gift cards like iTunes, or Google Play
  • transferring money into an account with a BSB that is not held with the Reserve Bank of Australia
  • sending money via other methods like:
  1. Bitcoins;
  2. ATMs; or
  3. Pre-paid credit cards.

How you can tell if you are being scammed?

The ATO report scammers use software that resembles a legitimate phone number to disguise the caller’s true identity.

The ATO does not project their numbers using caller ID. Therefore, you can be confident that if there is a number displayed in your caller ID, it isn’t from the ATO.

Taxpayers should be wary of any phone call, text message, email or letter about a tax refund or debt, especially if you are not expecting it.

While the ATO regularly contacts taxpayers by phone, email and SMS, there are some tell-tale signs that it isn’t the ATO. The ATO said they will not:

  • use aggressive or rude behaviour, or threaten you with arrest, jail or deportation;
  • request payment of a debt via iTunes, pre-paid visa cards, cryptocurrency or direct credit to a bank account with a BSB that isn’t either from the Reserve Bank’s 092-009 or 093-003;
  • request a fee in order to release a refund owed to you; or
  • send you an email or SMS asking you to click on a link to provide your tax file number, login, personal or credit card and bank and financial information, or to download a file or open an attachment;
  • send you downloadable files or tell you to install software.

What to do if you are at the receiving end of a tax scam?

If you ever get a tax scam call or email claiming you will be arrested due to a tax debt, simply hang up the phone or delete the email.

Do not call the number provided in the phone message or email you receive.

If you receive a suspicious email claiming to be from the ATO:

  • do not
  1. click on any links
  2. open attachments
  3. respond

If you like to check if the ‘ATO contact’ is legit or not, you can also call the ATO on 1800 008 540 to check.

What to do if you got scammed?

If you have provided your tax file number to someone who should not have it, or you suspect someone is misusing your TFN, phone the ATO’s Client Identity Support Centre on 1800 467 033 so they can discuss the best way to protect your tax account.

Who else to notify?

If you have made a payment to an ATO impersonation scammer, make an official report to your local police.

Contact your bank or financial institution if you have given your credit card or bank details to someone who shouldn’t have them.

You can also report the scam at: www.scamwatch.gov.au/report-a-scam.

Top tips from the ATO to protect yourself from scammers

  1. Know your tax affairs – you can log into: myGov to check your tax affairs at any time, or you can contact your tax agent or the ATO.
  2. Guard your personal and financial information – be careful when clicking on links, downloading files or opening attachments. Only give your personal information to people you trust, and try not to share it on social media.
  3. If you are unsure – about whether a call, text message or email is genuine, don’t reply. Call the ATO on 1800 008 540.
  4. Know legitimate ways to make payments – scammers may use threatening tactics to trick their victims into paying false debts in pre-paid gift cards or by sending money to non-ATO bank accounts. To check that a payment method is legitimate, visit: www.ato.gov.au/General/Paying-the-ATO/How-to-pay/
  5. Talk to your family and friends about scams – if you or someone you know has fallen victim to a tax related scam, call the ATO as soon as you can.

This article was co-authored by Bill Leung, HLB Mann Judd Melbourne