Identity Theft

A Scammer Convinced Me the IRS Was Throwing Me in Jail

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Lauren Oak was watching her young children, babysitting her infant nephew and caring for her wheelchair-bound father when the phone rang and brought on the scariest moment of her life.

“They said they were from the IRS, that I owed $16,000, that a warrant had been issued for my arrest, and that the sheriffs would be by within 24 hours to pick me up,” said Oak, a Long Island mom. “They told me to make sure I arranged for someone to bail me out…I started hyperventilating. I don’t think I’ve ever been that hysterical.”

“It was really terrifying.  I kept thinking, ‘what will I do with the kids?” she said.

Oak hung up abruptly with the caller, and reached her brother, a New York City cop, who assured her she wasn’t going to jail.

“He said it was a scam, but I said, ‘No, it’s not a scam! They knew all this about me’” she said. “They said my license and passport were going to be revoked for 10 years.”

It was a scam.

How It Works

The IRS has issued several warnings this year about a “pervasive telephone scam” that is “sophisticated and aggressive.”

“Potential victims are threatened with deportation, arrest, having their utilities shut off, or having their driver’s licenses revoked. Callers are frequently insulting or hostile — apparently to scare their potential victims,” says the IRS in its most recent warning.

However bad that sounds, Pindrop Security says things are even worse. The Internet security firms, which maintains a database of phone number fraud activity, estimated that 450,000 people were targeted by the scam in March. Pindrop says the scammers are using an inexpensive IP telephone service to make calls appear as if they are coming from inside the U.S. The callers are actually in India, the firm says. This scam has caused 10 times more complaints than any other IRS phone scam the firm has ever tracked.

Criminals try to scare victims and then talk them into wiring money, allegedly to settle the tax debt and avoid jail time. Victims are told to use a GreenDot MoneyPak card or to wire money to a PayPal account.

Pindrop also had an employee intentionally “fall” for the scam to examine the criminal techniques, which are quite bold. In that call, the operator tries to convince the employee that he owes money for overseas transactions related to mutual fund investments.

“When there are overseas transactions under your name, you need to pay the full portion of the transaction fees to the IRS Department, which you never did. They have investigated each and every thing, and they have filed a lawsuit complaint against your name,” an operator tells the faux victim, according to a transcript on Pindrop’s website.  “In a few days, the arrest warrant will also be issued under your name.”

Don’t Fall for It

Oak’s brother was able to calm her down, but not before the kids got a whiff or what was going on. She heard her 8-year-old twins discussing that “Mommy’s going to jail.”

“They were upset about it. I had to tell their teachers about it the next morning, because I knew they would talk about it at school,” Oak said.

She reported the incident to the IRS, but the agency merely asks consumers to leave a message on a voicemail box. She also called the New York State attorney general’s office, which referred her to the FBI. The FBI said it couldn’t do anything.

Oak has no idea where the scammers got her phone number. The IRS says recent immigrants are targeted by the scam, but Oak doesn’t fit that profile. She did, however, have a really good scare.

“I just want everyone to know about this so they are prepared if they get a call,” she said. “I wouldn’t wish this on someone I hated.”

[Editor's Note: The reason this scam works is because of consumers' fears about going to jail and also the negative impact collection accounts can have on your credit. You can check your credit reports for free once a year to see if a collection is hurting your credit, and you can see the impact collections are having on your credit scores for free on Credit.com.]

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