Security Scams Slam Businesses During Tax Time

With the April 15 tax deadline looming, security experts are cautioning businesses to be on the lookout for new tax-related scams that can lead to loss of critical company data and identity theft, not to mention drain employee productivity.

Identity Force, a provider of identity theft tools, recently issued a Tax Season Fraud Alert, cautioning consumers and small and midsize businesses alike to prepare for a surge in e-mail and phone calls from con artists and overseas fraudsters who capitalize on the fact that people are intimidated by the Internal Revenue Service to steal corporate identities and drain bank accounts. In the past year, Identity Force said, the IRS has received notification of over 1,500 different scams and is currently investigating over 33,000 suspicious e-mails forwarded by people targeted by such fraudsters.

"People are more susceptible right now because of the sensitivity that surrounds tax season and the authority the IRS carries," said Steve Bearak, CEO of Identity Force. "People are genuinely intimidated when someone calls and says they're from the IRS, looking for tax or bank information. It's amazing how many people will provide that kind of information out of fear."

While SMBs are not more vulnerable to these threats from a technological perspective than larger companies, they are less apt to enforce formal operating procedures and best-practice policies to protect themselves. "SMBs typically don't have the infrastructure in place and they don't pay as much attention to education, compliance and response," Bearak said.

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As part of their vigilance, Bearak recommends that SMBs take steps to create and enforce such best practices. This includes designating a point person to take responsibility for monitoring any suspicious activity so there is accountability and less confusion within the organization. Bearak also councils SMBs to actively educate their work force about the scams and whom to inform in case of a problem. Finally, he advises establishing a mechanism and procedure in the event that suspicious incidents do occur so problems are brought to the proper individuals who can initiate some sort of response.

Educating employee ranks regarding how much impact such scams can have on both a personal and company level is also important to maintaining productivity, he said. "In the event an employee falls victim to one of these things, they're going to turn to their employer because they don't know what to do," Bearak said. "It can be a distraction in the office and keep people away from their work."

Identity Force cites four tax-related scams in its alert:

Phony Tax Investigation Scams: These are e-mails or phone calls from individuals claiming to be IRS investigators working to clear up tax return errors who invoke threats of audits or penalties to gain access to personal information.

Phony Tax Refund Scams: These are e-mails or phone calls from fraudsters posing as IRS employees attempting to verify personal information to process tax funds.

Economic Stimulus Scams: Coming on the heels of the recently announced economic stimulus package, these are calls or e-mails from fraudsters claiming to be IRS reps asking for personal information such as Social Security numbers in order to expedite refunds.

Phony Tax Preparer Scams: These are e-mails or calls from fraudsters posing as tax preparers claiming to have the ability to significantly increase or expedite tax refunds.

While consumers are obviously more susceptible to some of these scams, Bearak said SMBs are also a likely target due to the perception that they're less savvy and have fewer protective resources than larger companies. Bearak said, "SMBs can face the greatest risk with more limited resources. Vigilance is the key message."