Home > 2014 > Identity Theft

A Scammer Convinced Me the IRS Was Throwing Me in Jail

Advertiser Disclosure Comments 0 Comments

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.]

More on Identity Theft:

Image: christingasner

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team