Every year, the IRS and the Better Business Bureau (BBB) receive numerous complaints about fraudulent activities and financial scams. These scams can be devastating, causing people to lose their hard-earned money and personal information. It’s important to be aware of the top scams reported by the IRS and BBB to avoid falling victim to them.
Here are 30 scams reported by these two organizations.
- Phishing Scams: Phishing scams are one of the most common types of fraud reported by the IRS and BBB. In these scams, scammers send emails or texts that appear to be from a legitimate source, such as the IRS or a bank. The emails or texts usually contain a link or attachment that, when clicked, can install malware on your device or take you to a fake website where you’re asked to enter personal information.
How to avoid: Be cautious of unsolicited emails or texts, fraud alerts with poor spelling, and do not click on links or attachments from unknown sources. Check the sender’s email address and hover over links to see the URL before clicking on them.
- Tax Preparation Scams: Tax preparation scams occur when a scammer offers to help you prepare your taxes but steals your personal information or charges you exorbitant fees for their services.
How to avoid: Use reputable tax preparers or software and be wary of any preparer who charges exorbitant fees or asks for personal information beyond what is necessary for tax preparation.
- Identity Theft: Identity theft is a common scam where a thief steals your personal information and uses it to commit fraud or other crimes. This can include stealing your social security number, credit card information, or other personal data. If you become a victim of identity theft, report it to a federal agency or local law enforcement partners.
How to avoid: Protect your personal information by using strong passwords, shredding sensitive documents, and monitoring your credit report regularly.
- Overpayment Scams: Overpayment scams involve scammers sending a fraudulent check or money order to an individual, typically for a purchase. The scammer will then ask the recipient to return some of the money, often in the form of gift cards or wire transfers.
How to avoid: Never accept payment for more than the agreed amount and always ask for proof of identity from anyone who sends you a check or money order. If you receive a check or money order for more than the agreed amount, contact the sender to confirm it is legitimate before taking any action.
- Lottery Scams: Lottery scams involve scammers contacting victims and telling them they’ve won a lottery or sweepstakes. The scammer may then ask for personal information or request that the victim pays a fee to claim their winnings.
How to avoid: Sidestep a prize scam by remembering that legitimate lotteries do not require payment to claim winnings and do not give out personal information to claim a prize.
- Investment Scams: Investment scams are designed to make victims believe they can make a lot of money quickly and easily. However, these scams are usually fraudulent and can cause victims to lose a lot of money.
How to avoid: Be wary of scam artists who promise high returns with low risk and only invest with licensed professionals or companies.
- Tech Support Scams: Tech support scams involve scammers pretending to be from a tech support company and offering to fix a victim’s computer or device. These cons often begin with suspicious emails. For example, the scammer may install malware on the victim’s device and then email them to charge the victim for services to remove the malware.
How to avoid: Do not allow unsolicited individuals access to your computer or device, and do not give out personal information or payment for services.
- Employment Scams: Employment scams involve scammers offering fake jobs or work-from-home opportunities. The scammer may ask for personal information or charge a fee for their services.
How to avoid: Research the company and the job offer before providing personal information or payment, and be wary of any job offers that seem too good to be true.
- Romance Scams: Romance scams involve scammers creating fake profiles on dating websites or social media platforms and tricking victims into sending them money or personal information. Unfortunately, people all across the country have been scammed out of millions of dollars due to romance scams.
How to avoid: Be cautious of individuals who quickly ask for money or personal information, and do not send money to individuals you have not met.
- Social Security Scams: Social security scams involve scammers contacting victims and claiming to be from the Social Security Administration. The scammer may then ask for personal information or demand the victim pay a fee.
How to avoid: Remember that the Social Security Administration does not call or email individuals requesting personal information or payment.
- Grandparent Scams: Grandparent scams are among the most common phone scams. They involve scammers calling older adults and pretending to be their distressed grandchildren. The caller typically claims to have been unjustly arrested, caught up in a natural disaster, or stranded in some faraway place and needing travel expenses. The scammer then asks for money — usually through a money transfer or wire transfer, as they’re hoping for a quick profit.
How to avoid: Verify the caller’s identity before providing any personal information or payment and contact the grandchild or their parents to verify any distress claims.
- Utility Scams: Utility scams involve scammers pretending to be from a utility company and threatening to shut off the victim’s utilities if they don’t pay a fee.
How to avoid: Verify with the utility company before making any payments or providing personal information and report suspicious calls or emails. Reputable companies don’t initiate fake calls or engage in bad business practices like threatening to shut off your utilities without advanced written notice.
- Debt Collection Scams: Debt collection scams involve scammers pretending to be debt collectors and demanding payment for a debt that the victim may or may not owe. They may also try to create a sense of urgency by suggesting you’ll get sued if you don’t pay immediately.
How to avoid: Request written verification of the debt and do not provide payment from your bank accounts or personal information until the debt is verified.
- Travel Scams: Travel scams involve scammers offering cheap travel deals or vacation packages. However, these deals are usually too good to be true and may involve hidden fees or other scams.
How to avoid: Research the travel company and the deal offered before paying or providing personal information.
- Work-from-Home Scams: Work-from-home scams involve scammers offering fake job opportunities that allow victims to work from home. However, these jobs usually require victims to pay a fee or purchase expensive equipment.
How to avoid: Be wary of any job offers that require payment or personal information, and research the company and the job offer before accepting.
- Credit Repair Scams: Credit repair scams involve scammers offering to fix a victim’s credit score or remove negative items from their credit report. The scammer may then ask for a fee or personal information.
How to avoid: Verify the legitimacy of the company and the services offered before providing payment or personal information.
- Impersonation scams: Scammers may call, email, or send letters claiming to be IRS agents or other government officials, threatening fines or legal action if a payment is not made immediately.
How to avoid: Remember that government agencies do not threaten fines or legal action over the phone or through email. Verify the caller’s identity before providing any information or payment.
- Fake refund scams: This type of scam involves scammers pretending to be the IRS and promising a refund in exchange for personal information or payment of a fee.
How to avoid: Verify the legitimacy of the refund offer through the official IRS website or hotline, and do not provide personal information or payment.
- Tax relief scams: These scams involve scammers offering to help reduce or eliminate tax debt in exchange for a fee. Often, these scams involve promising unrealistic or illegal tax savings.
How to avoid: Be cautious of any company or individual promising to eliminate tax debt and verify their legitimacy before providing payment or personal information.
- Social media scams: Scammers may use details from your social media posts or the profile info on your social media platforms to solicit personal information or money from unsuspecting individuals.
How to avoid: Do not provide personal information or payment to individuals or companies on social media platforms, and be cautious of unsolicited messages or friend requests.
- Inheritance scams: These scams involve scammers claiming to be representatives of deceased individuals, offering to share their inheritance in exchange for personal information or payment of a fee.
How to avoid: Verify the representative’s identity and the inheritance’s legitimacy before providing any personal information or payment. If a loved one has just passed away, hang up if you receive cold calls, aggressive calls, or unwanted telemarketing calls about the deceased.
- Pyramid schemes: These scams involve scammers recruiting individuals to invest in a system where the participants at the top of the pyramid earn money from those at the bottom.
How to avoid: Do not participate in any investment scheme that requires recruiting new participants and promises exorbitantly high returns. Often, the latter participants become victims of scams and financial fraud.
- Door-to-door scams: These scams involve scammers going door-to-door offering home improvement or other services but requiring payment upfront and failing to deliver the promised services.
How to avoid: Verify the legitimacy of the company and the services offered before providing payment upfront, and do not allow unsolicited individuals access to your home.
- Rental scams: These scams involve scammers offering rental properties at below-market rates but requiring payment of a deposit or first month’s rent upfront and failing to provide access to the property.
How to avoid: Verify the legitimacy of the rental property and the landlord before providing payment upfront, and do not provide bank account info over email or phone calls.
- Fake invoice scams: These scams involve scammers sending fraudulent invoices to businesses or individuals, hoping to trick them into paying for services or products that were not ordered.
How to avoid: Verify the legitimacy of the invoice and the services or products ordered before providing payment.
- Investment seminars: These scams involve scammers offering free investment seminars but requiring payment of a fee to access the full range of investment opportunities.
How to avoid: Trust your gut. If something seems too good to be true, it probably is. Be skeptical of any investment opportunity offering outsized returns with minimal risk—research companies and advisors before investing your hard-earned money.
- Charity scams: Charity scams involve scammers posing as representatives of legitimate charities to solicit donations. They may use various tactics, such as creating fake websites that mimic those of the original charity or claiming to have a personal connection to the cause they are advocating for.
How to avoid: To avoid becoming a victim of this type of scam, it is essential to research charities before donating and only provide payment or personal information to organizations that can be verified as legitimate. Don’t be rushed into making a decision—take time to ask questions and research the charity before donating.
- Tax scams: Tax scams involve scammers posing as representatives from the Internal Revenue Service (IRS) to solicit personal information or payments.
How to avoid: The IRS will never require payment of taxes via a prepaid debit card, wire transfer, or gift card. If you receive a suspicious call from someone claiming to be from the IRS, hang up and report it to the Treasury Inspector General for Tax Administration. Don’t give them your Bank PIN, bank and check information, or any details from your bank statements.
- Mortgage Loan Modification scams: Mortgage Loan Modification scams involve scammers offering to modify loans on behalf of homeowners in exchange for an upfront fee and failing to provide the promised services. These scammers often target homeowners struggling with their mortgages and seeking relief.
How to avoid: Do not pay any fees upfront or provide personal information, such as your Social Security number, bank account numbers, or other sensitive data.
- Unemployment scams: Unemployment scams involve scammers posing as representatives from state unemployment offices to obtain personal information or payment. These scammers often use tactics such as convincing individuals to provide confidential information by pretending to “verify” their identity or providing a false website address that looks similar to the legitimate ones.
How to avoid: Be wary of anyone offering unsolicited job opportunities, especially if they require you to provide personal information or payment. Verify the identity of anyone offering a job by contacting the hiring organization directly. Never give out sensitive information, such as your Social Security number, bank account number, or other private information.
In conclusion, it’s essential to raise your awareness about financial fraud. By becoming aware of these top scams reported by the IRS and BBB, you can be more vigilant in protecting your personal information and finances.