Americans have begun receiving their IRS stimulus check 2020, but this surge of funds is also attracting scammers.
The US government is giving away $1,200 stimulus checks to those affected by the coronavirus pandemic.
Reports show that consumers have already lost more than $13.4 million to financial fraud since January 2020. There was a median loss of $558 per person. Moreover, nearly one in five scam reports used unsolicited texts or calls, including impostors disguising as a government entity.
Experts believe the number of such scams may increase as the government starts dispersing stimulus money.
“With chaos comes an opportune time to take advantage of others,” says Seattle-based CFP Jedidiah Collins, who runs the company Rookie to Veteran.
Scammers expect the public to be anxious about getting their stimulus money quickly that they will likely take the bait without closely scrutinizing the details.
Financial scam tactics
Kim Cobb, a financial fraud expert and managing director of Texas-based Little GG Capital, explains the three tactics involved in financial scams.
These are fake checks being sent in the mail and impersonators calling people on the phone. The third is phishing schemes disseminated through text messages, email, and social media platforms.
Scammers can create fake stimulus checks for a larger amount than one is supposed to receive. They will notify victims, saying they were overpaid. Victims will be asked to need to return the money back through cash, gift cards, or money transfers.
When the fake check bounces, the victim will then be out that money, along with anything they gave to the scammers.
Phishing refers to the digital attempt to trick people by appearing to be someone that can be trusted. Those behind phishing emails target sensitive personal and financial information. They will collect Social Security numbers, bank account numbers, or login information and passwords.
The information will help scammers empty accounts and commit other kinds of fraud and identity theft.
“Never, ever give out your personal information,” Cobb says.
Four ways to avoid stimulus payment scams
One should remember that there is nothing one should do to claim one's IRS stimulus check in 2020.
“As long as you filed taxes for 2018 and/or 2019, the federal government likely has the information it needs to send you your money,” the Federal Trade Commission said in its report.
Hence, there is nothing to sign up for. There is also no need to give anyone personal information. To speed up the receipt of stimulus check, one can file their 2019 tax return or sign up for direct deposit with the Internal Revenue Service (IRS).
The second thing Americans should note is that the IRS will not contact them regarding their payment. They must not respond to strange phone calls, voicemails, and text messages. These scammers will claim they are from the IRS or any other government agency.
Moreover, Cobb says a telltale sign one is dealing with a scammer is that they will use the unofficial terms. The IRS uses the term "economic impact payment" instead of "stimulus check" or "coronavirus check."
There will never be overpayment, according to Cobb. One's economic impact payment is based on the most recent tax return for either 2018 or 2019. In addition, the maximum payment is $1,200 per adult and $500 per child.
Experts point out that even if one's eligibility changes, it is unlikely that they have to pay the IRS back when they file their taxes next spring.
Cobb asks Americans to remain vigilant during the pandemic. Scammers are “dialing it up,” she says, because for them, opportunities like this hardly come.
