The Better Business Bureau has released its annual list of top scams, which the consumer advocacy group compiles at the end of each year. The top 2016 scam, for the second year in a row, was U.S. Internal Revenue Service and Canada Revenue Agency tax scams. For the full-2016 year, the bureau states that tax scams made up 25 percent of all scam complaints received, up 1 percent, from 24 percent, in 2015.
In October, police in Mumbai, India raided a call center thought to be responsible for a number of incidents. The BBB reports that before the raid, the group was receiving as many as 200 reports of tax scams from residents in the United States and Canada, each week.
The week after the Mumbai raid, the number was reported to have dropped to 11, by almost 95 percent.
Tax scam artists ask for payment in gift cards
Tax scams typically involved a fraudster posing as a representative of the IRS or CRA on the telephone, making false claims that individuals owe back taxes and face fines and even criminal prosecution if the debt isn't paid immediately. Scammers are reported to have asked for payment with iTunes gift cards. In June, CTV News reported that Ottawa, Ontario resident Michelle Jaksic was duped into buying $12,500 worth of gift cards in an attempt to appease a con artist and "keep her out of legal trouble." At the time, Ottawa police reported receiving as many as 100 tax scam complaints, each day.
New additions to the BBB top scams list in 2016 included phishing, employment, and online purchase scams. The bureau noted that 2016 was the first year that work-from-home scams, which previously had their own designation, were included in the employment scam figures, resulting in the appearance on the list. The Royal Canadian Mounted Police describes con artists offering high-end goods for sale for huge discounts online, taking customer's payments, and then never delivering products.
Phishing scams often involve the use of emails, designed to look like they were produced by a legitimate financial organization, asking consumers to reveal passwords or other sensitive personal information, which can then be used for a number of nefarious purposes, including identify theft.
Scam operators continue to seek new methods
Other top 2016 scams listed by the BBB include those related to debt collection, lottery/sweepstakes, government grants, tech support, advance fee ploys, and phony checks. The number of complaints received by the bureau related to each of these scams fell marginally from 2015 to 2016. BBB Scam Tracker Manager Emma Fletcher stated that the group will be maintaining its watch through 2017, in order to "alert consumers what the ‘next big thing’ in scams turns out to be."
Seven-hundred employees were said to be on duty when police raided the Mumbai call center, where a great many tax scams are thought to have originated. Seventy people were charged with "fraud and other crimes" during the raid, which was said to have been conducted at nighttime. Ms. Fletcher described the steep drop in the number of tax scam complaints received following the raid as "remarkable."
