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Consumer Protection Agents Warn Of Tax Collection Scams

[pedrorsfernandes / shutterstock]
An illustration of two sharks swimming on an iPhone screen.

Typically, the scheme works like this: you get a call from someone claiming to be with the IRS, who then claims that you owe a bunch of money. 

"They tell you that you didn't pay taxes or you didn't file on time, and there's a warrant out for you," said Sheryl Harris, Director of Cuyahoga County's Department of Consumer Affairs, which is holding a series of events this week aimed at spreading awareness of various scams. "They're really scary calls."

Of the approximately 300 complaints the agency received last year, Harris said individuals impersonating tax collectors was one of the most common.

Harris said scammers often request money in the form of gift cards or wire transfers, which a real government office would never do. She said if you get such a call, the best thing to do is not to rush to make a payment, but instead, hang up and call the IRS directly. 

In 2017, the top three reported scams in Ohio were debt collection, identity theft, and imposter scams, according to the Federal Trade Commission’s (FTC) Consumer Sentinel Network Data Book. The financial loss as a result of fraud was about $14.7 million, the agency states, with the median reported loss in each case equaling about $400.

On a nationwide level, the FTC reports that individuals between the ages of 20-29 reported losing money to fraud more often than people over 70, with younger people making up 40 percent of complaints compared to 18 percent for the older group. 

In 2017, the nationwide loss due to fraud was $905 million, according to the Federal Trade Comission. [Consumer Sentinel Network Data Book 2017]

Cuyahoga County's consumer protection agency gets dozens of complaints about fake tax collection and imposter scams every year, Harris said, but the actual number is probably much higher, as many of the victims are probably embarrassed.

"We estimate that about only 1-in-20 scams ever gets reported."

And that's a problem, Harris said, because one of the best ways to prevent someone from getting scammed, is to tell others about it.