CRA Phone Scam Revs Up: 2016 Victims Already Outpace 2015

You come home from work, hit your telephone voice mail button and hear the following: “Court proceedings have begun, a lien is being placed on your property and the cops are on their way to put you in jail, unless you pay immediately.”

That’s what people are basically hearing in a recently revved-up telephone tax scam. The chances that you’ll receive phone calls like this have made a quantum leap this year. Police agencies across the country are issuing warnings, and the Canadian Anti-Fraud Centre (CAFC) reportedly has said that more people and businesses were victims of this scam in the first half of 2016 (811 victims defrauded of $2.5 million) than in all of 2015.

No matter how law-abiding a citizen you are, if you hear these threats, odds are you’ll panic for at least a second or two. Even if your accountant completed your tax returns, when you hear threats of jail and liens or worse, you might wonder if a mistake was made somewhere along the line or there was some bureaucratic blunder.

Scams Are Often Threatening

These forms of extortion can become extremely sinister, too. Earlier this year, the Royal Canadian Mounted Police warned of a phone call where the scammer threatened to kill the person or blow up his home if he called the police (of course, if you’re contacted by a scammer, that’s exactly what you should do).

Scams are nothing new to the Canada Revenue Agency (CRA), but the scammers are ever more inventive in the ways they actually try and get the money. Earlier, scammers asked victims to pay with prepaid credit cards. Now they ask for iTunes gift cards.

One woman reportedly was defrauded of more than $20,000 in this adaptation of the scam script, after being told that if she didn’t pay she’d be imprisoned for 11 years. She was told to buy the cards and call the scammers back with the activation codes on the back of them.

The criminals often will demand Social Insurance Numbers or the numbers of credit cards, bank accounts or passports. A recent wrinkle in this scam urges recipients to visit a fake website that looks identical to the CRA site. There, taxpayers are asked to verify their identities by entering personal information.

Fight Back

So what can you do to fend off scammers? The CRA recommends that you set up an account on its secure website called My Account. The agency will email your registration to you and you can confirm it online. It will also send you an email when you have a message in your account.

You can also contact the CRA to confirm that you do, in fact, owe back taxes or are due a refund. In addition, don’t use any phone number that the caller provides or that’s listed on your call display. Look up the phone number yourself from a reliable source.

Be aware that the CRA will never:

• Contact anyone for personal or financial information,
• Request payments from prepaid credit cards or iTunes gift cards,
• Give personal information to a third party,
• Leave personal information on voicemail,
• Send email with a link and ask for personal or financial information, or
• Ask for personal information of any kind by email or text message.

If you call the CRA to request a form or a link for specific information, a CRA agent will forward the information you’re requesting to your email while you’re on the phone. This is the only circumstance in which the CRA will send an email containing links.

More Tactical Moves

If you’re contacted by an unknown person claiming to be from the CRA, step back and ask yourself:

• Why would the CRA be asking for personal information over the phone or in an email (or text) that it likely already has on file for you as a taxpayer?
• Why would the CRA want you to pay outstanding money with gift cards?
• Did you sign up to receive online mail through My Account, My Business Account or Represent a Client?
• Did you provide your email address on your income tax and benefit return so you could receive mail online?
• Are you being asked for information you wouldn’t provide on your tax return?
• Are you expecting more money from the CRA?
• Does what the caller is saying sound too good to be true?

In addition, here are 12 more steps you can take to help protect yourself from tax scams or identity theft:

1. Be suspicious if you’re ever asked to pay taxes on lottery or sweepstakes winnings — they generally aren’t taxable.
2. Keep access codes, user IDs, passwords, and PINs secret.
3. Be careful before you click on links in emails you receive.
4. Never confirm an ID by the information displayed on Caller ID, whether it indicates an individual, company or government entity. These numbers can be manipulated.
5. Don’t use your Social Insurance Number as a piece of identification and never reveal it to anyone unless you’re certain the person or organization asking for it is legally entitled to the information.
6. Pay attention to your billing cycles and ask creditors about any missing account statements or suspicious transactions.
7. Shred unwanted documents or store them in a secure place.
8. Make sure documents with your name and Social Insurance Number are secure.
9. Immediately report lost or stolen credit or debit cards.
10. Carry only the ID you need.
11. Don’t write down passwords and carry them with you.
12. Ask a trusted neighbour to pick up your mail when you’re away or ask Canada Post to put a hold on deliveries.

You also can contact your accountant, who is well-versed in the ins and outs of tax scams. If you become a victim, or know someone who has, call the Canadian Anti-Fraud Centre toll free at: 1-888-495-8501.