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Anger Over Refunds Fuels Phishing & Fraud

(posted: March 25th, 2019)

Americans anticipated greater refunds from the IRS this tax season due to last yearís tax code legislation. Instead, many are now fuming with anger and frustration as the average tax return is down nearly 17% year-over-year. While there are some indications that refunds are beginning to rebound, the perception that the tax cut will not benefit the majority of middle class and lower-class taxpayers has been successfully painted.

One significant but underreported unintended consequence of the Trump tax cuts is how taxpayer anger is leading to the proliferation of new social engineering attack techniques - ones that play to the heightened emotions of those who feel wronged by the Administration, Congress, the IRS or a combination thereof. Good hackers are related to old-school con men, and they are adept at exploiting people's emotions, especially anger.

Anger Creates Opportunity for Scammers

Hackers and cyber criminals committing fraud around tax season is nothing new. For years, the IRS has warned filers about the latest W2 scams, "ghost" preparers trying to make a quick buck and spear-phishing emails that entice users to take an action such as downloading a fake tax document, subsequently spreading malware or ransomware to their systems and devices. (See our related post on the IRS's Dirty Dozen tax scams.)

In 2018, an astounding 33 percent of those targeted with an IRS-themed phishing campaign were millennials. Despite being digital natives, this generation, ironically, has proven the most likely to fall for a tax season phishing scam in the past few years, replacing grandma and grandpa as the most vulnerable constituency.

However, the current anger over diminishing returns is not a millennial-centric problem - it is transcending age groups and socio-economic status. And attackers have taken notice.

What matters to the fraudsters is that a portion of the U.S. population is very unhappy, and as such, highly susceptible to a well-crafted social engineering attack.

It is easy for attackers to identify who to target.

Through simple online research, which can even be automated, attackers can uncover who is mad about their return and find ways to exploit that anger through highly-personalized messages. They will attempt to mollify the target, indicating that

  • a refund amount has been increased
  • thereís a way to increase a refund
  • the decreased return is due to a misfiling or
  • the IRS made a mistake

Once they have the taxpayer hooked, itís only a matter of time before someone is tricked into providing confidential information or persuaded into clicking on a link or into downloading an attachment.

Don't Let Your Anger Make You a Target

It's easy to forget that what you say and do online is available to the world. Photos, memes, gripes directed at your friends on Facebook, all of it is easily accessed by determined fraudsters.

Fortunately, there are two common-sense steps that can be taken to reduce the risk of falling victim to a tax season phishing scam. These include:

  • Avoid expressing your outrage via social media. If you think your post decrying your tax return will only be seen by your friends and family, think again. Attackers are constantly poking around on social media channels to identify people's behaviors, preferences, locations and other personally identifiable information. In fact, social media often presents attackers with roughly 80 percent (possibly more depending on privacy settings) of the information they need to create a customized personal profile, which can then be used to create a micro-targeted impersonation email that looks and feels so real itís almost impossible to tell that that itís a fraud. Such emails are especially effective when they are positioned to tap into a source of anger.
  • Do not comment in forums & news sites. Much like social media, platforms like Reddit and the comments section of articles (or YouTube videos) are frequently navigated by attackers seeking information that can be used to build social engineering attacks. Once an attacker has access to a personís forum handle, email address or another identifier, he or she has more than enough detail to acquire additional information using any number of free and dark web tools. Youíd be amazed at how quickly an attacker can develop a social engineering profile by initially accessing only a username.

In todayís email phishing threat landscape, it is imperative that we all do what we can to reduce personal risk of being targeted by a phishing attack. While the urge to complain or vent on social media or in forums might be strong, doing so may ultimately set you up for a scam that is impossible to self-identify, the outcomes of such being far more financially devastating then the amount lost on this yearís tax returns.

As a reminder, if you are the recipient of an email, social media message or phone call claiming to be from the IRS, please first validate the message by visiting IRS.gov or by calling the Tax Assistant Hotline before you take any actions that could lead to irreversible harm.

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