An IRS telephone scam has reached unprecedented levels, state and federal officials said Friday, but catching the perpetrators will be difficult.
So North Carolina’s top prosecutors issued this warning: If someone calls claiming to be with the IRS, hang up.
The scheme has cost 225,000 consumers nationwide more than $11 million since October 2013, including 22 people in North Carolina who lost a combined $100,000.
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“There is a sharp spike in this scam right now,” Attorney General Roy Cooper said. “It’s very difficult to catch them. They can be scamming you in Charlotte … and be halfway around the world.”
Some scams – such as the you’ve-won-the-lottery scam – prey on people’s greed, said Tom Bartholomy, president of Better Business Bureau of Southern Piedmont. Charity scams prey on people’s compassion.
The IRS scam, he said, preys on their fear.
Cooper explained what happens when you get a phone call: “Your caller ID says it’s from the IRS. Someone who is very authoritative says you owe federal taxes and need to pay them now.”
If you don’t comply, he said, your phone may ring again. This time, caller ID says it’s the local sheriff or police. “They tell you you are going to be arrested.”
The BBB has received as many as 10 complaints about the scam every day over the past several weeks, twice as many as any other scam in 2014. “It is No. 1 on our hit list,” Bartholomy said.
U.S. Attorney Anne Tompkins outlined several other telemarketing scams that have been successfully prosecuted. But she said catching the IRS fraudsters will be “very difficult.” Tompkins declined to provide details about the investigation.
Bikram Bandy, who coordinates the Federal Trade Commission’s Do Not Call Program, previously told the Observer that the scheme is operating out of a rogue call center in India. He said investigators here are working with investigators there.
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The Rev. Al Cadenhead, senior pastor at Providence Baptist Church, was duped out of $16,500. As foolish as he believes it makes him look, Cadenhead told the Observer in October and continues to speak out publicly in the hope of preventing others from being taken in, too.
A caller who pretended to be an IRS agent persuaded Cadenhead to borrow the money from his bank and drive to eight Rite Aid stores to purchase Green Dot MoneyPak prepaid debit cards. He then got Cadenhead to read the PINs on the cards, which enabled the impersonator to collect the money.
Former Carolina Panther Frank Garcia was scammed out of $8,000 the same way.
“They knew just one intimate detail after another,” Cadenhead said at Friday’s news conference. “They scare you to death.”
Asked whether someone within the IRS could be feeding the scam artists information, Melissa Chedotal, a special agent in charge with the Treasury Inspector General for Tax Administration, said the agency is investigating whether there is any “internal fraud,” among other things.
But Chedotal and other officials emphasized that all sorts of information about people can easily be culled from the Internet. The callers, Tompkins said, know just enough to sound legitimate. They may know your address. Or the last four digits of your Social Security number.
A technology called Voice Over Internet Protocol allows them to place calls cheaply over the Internet from anywhere in the world. They use Internet software that makes it appear they’re calling from the IRS or another government agency. They insist on payment by prepaid debit cards because they’re difficult to trace.
If you get a call, go to www.treasury.gov/tigta to report the scam. You also can report it to TIGTA at 800-366-4484, the N.C. Attorney General’s Office at 877-5-NO-SCAM (877-566-7226) and the BBB at 704-927-8611.
And then do this: Warn your friends.