Phone-Based Fraud Takes Off During Tax Time

 
 
By Robert Lemos  |  Posted 2014-04-17
 
 
 

Scammers are going back to the basics, increasingly using old-school telephone calls to defraud victims, with one group of grifters targeting up to half a million consumers, according to analysis published on April 17 by anti-fraud firm Pindrop Security.

Following a warning by the Internal Revenue Service of stepped-up fraud targeting consumers, Pindrop analyzed its database of suspect phone numbers and discovered that at least 235 phone numbers appeared to be connected to a group conducting IRS tax scams in March. Using rough calculations of the calls that could be made from each phone number, the company estimated that, potentially, more than 450,000 consumers have been targeted by the group.

The group appears to be operating out of India, Vijay Balasubramaniyan, CEO of Pindrop Security, told eWEEK.

"For a 30-minute call, sitting in India and making $2,500 or $5,000 by the end of the day, it is a totally worthwhile investment of time for these guys," Balasubramaniyan said. "You can apply all the emotional pressure on the phone that you can't apply using email."

On April 14, the Internal Revenue Service warned consumers to beware aggressive and sophisticated attacks by fraudsters that have access to detailed personal information, such as the last four digits of their social security numbers. In many cases, the scammers target foreign workers and immigrants, threatening to deport them unless their "fines" are paid.

The scammers also use fake names, made-up badge numbers and spoof IRS toll-free numbers to fool potential victims, the agency said in its alert. In many cases, the fraudsters call back a second or third time, claiming to be the local police department or other government agency.

"Reported incidents of this crime continue to rise nationwide," the IRS stated. "These scams won’t likely end with the filing season so the IRS urges everyone to remain on guard."

In one case, a foreign student at Georgia Tech paid a group of fraudsters $1,500 after they posed at agents from the U.S. Department of Homeland Security and threatened her with deportation, Raj Bandyopadhyay, principal data scientist at Pindrop, told eWEEK. They knew a great deal of personal information about her, including her passport details, he said.

"These guys tend to focus on vulnerable populations in the country and they can really, really get aggressive in extracting money," Bandyopadhyay said.

Pindrop noted that the scam appears to be accelerating. In 2012, the company flagged more than 780 numbers connected to the scam. In the first three months of 2013, the company has already seen 523 numbers connected to the scam.

As part of its analysis, the company had an employee pose as a victim and call one of the numbers. The scammers attempted to keep the employee on the line until he had completed a transfer of money into their account. The fraudsters even called back several times and may have posed as a money transfer agent asking for information on the transfer.

Pindrop recorded the call and posted the audio file and transcript online.

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