Some people associate the end of financial year (EOFY) with retail sales and shopping bargains, though it’s safe to assume the vast majority connects EOFY with tax time.
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Tax time has many negative connotations. With words like ‘debt’, ‘repayments’ and ‘fines’ being thrown around this time of year, any individual could quickly find themselves falling prey to financial anxiety. Unfortunately, scammers use this to their advantage.
We’ll talk you through the most common taxation scams and what you can do to ensure you don’t fall victim.
As June 30 nears, scammers start to take advantage of the lingering stress and anxiety that comes with tax time. The most common scam is the “fake tax debt” scam. Scammers will call members of the community and advise that they have an outstanding debt with the Australian tax Office (ATO). The scammers will provide fake identification numbers, names and contact details in an attempt to appear legitimate and will use scare tactics to pressure the individual to pay the outstanding debt.
They may even use the threat of arrest if the debt isn’t paid immediately. This is common among scammers in that they will often create a false sense of urgency, hoping to frighten the victim into making a payment.
Another tell-tale sign is scammers often request unusual methods of payment, such as gift cards for Apple’s App Store or Google Play, supermarket gift cards, cryptocurrency or even prepaid debit cards. Once the gift cards or prepaid debit cards are purchased, the scammers will request the card details and/or codes to redeem the value of the card from their side.
In the case of the cryptocurrency, as soon as the payments are authorised, the scammer will gain access to the funds. If you’re ever in this situation, you can improve your chances of recovering the funds by not providing the unique gift card identification numbers or card details.
Another common way the scammers will request access to funds is via Cardless Cash. They will prompt the individual to initiate a Cardless Cash request and ask for the code to authorise the cash withdrawal. Once the scammers have this code, they can withdraw the cash themselves from an ATM.
There are several ways scammers may initiate contact with a particular individual. It can be a call, as in the tax debt scam, or it can be a text message asking you to enter your personal details to claim a tax refund. If you ever receive any unsolicited contact from an individual claiming to be a representative of the ATO, the best thing to do it to contact the ATO on 1800 008 540 to verify the call or text.
If you receive a call from an individual claiming to be from the ATO, be aware that no legitimate government agency will ever ask you for card details or any other personal banking information over the phone nor will they threaten you with arrest for not complying.
As it approaches tax time, be scam savvy and always verify the legitimacy of any request for payment claiming to be from the ATO. The ATO will not request any personal details over the phone, ask you to click on any links sent via a text message, or request any NetCodes to verify a payment or refund.
For more information on ways to protect yourself, visit CommBank - How to protect yourself from scams.
