The IRS just called me! (protect yourself from financial fraud)

Financial and tax fraud scams are increasing and becoming more sophisticated. No doubt you or someone you know has received some correspondence, whether by phone, email, or regular mail, that has been fraudulent in nature. The Internal Revenue Service will not call you unless they have first reached out via paper mail multiple times. If you receive a call from “the IRS”, hang up the phone.

You receive an email from “the IRS”. See above. The Internal Revenue Service will not begin conversations with taxpayers through email.

The correspondence you receive, through any channel, is very urgent and asks you to act swiftly. Often the call to quick action is tied to an emotional connection to a relative or a serious medical or personal emergency. Ronald Reagan was famous for saying, “Trust, but verify” and his quote is applicable to this topic. Always verify before taking action to move money in or out of your financial accounts based on an urgent request.

You receive a threat to have law enforcement contacted if you do not comply with the request. This is a scare tactic and the fraud perpetrators are trying to get you to panic. Keep calm and see item #3 above.

You receive a request for your personal or financial information. The financial institutions you work with already have your information and should not be asking you to re-send personal information through non-encrypted channels. Please do not send any information like social security numbers, birth dates, account numbers, or personal identification numbers through email or give them out over the phone.

Slow Down

For most of us, life seems to only get busier and we want to reply and complete tasks as quickly as possible. However, with financial requests it pays to slow down, verify, and confirm that the request is legitimate.

If you are confused or tempted to act when you receive a financial correspondence described above, take a moment to have a spouse, trusted friend, or your financial planner review the request. Another recommendation is to pick up the phone and make a call to the alleged company making the request (if it appears to be a company) and find out if the request is legitimate and truly originated with that firm. You could also do a brief Google search if you don’t recognize the sender.

Being Proactive

You may already have a credit freeze in place with the three major credit bureaus. If so, good for you! If not, get those freezes in place. But how else can you protect yourself from financial fraud?

Here are three additional steps to take beyond freezing your credit with the major credit bureaus (Experian, Equifax, and TransUnion).

• Freeze your credit at the credit bureau, Innovis. You can visit https://www.innovis.com/ and add a Security Freeze to your account.
• Opt out of pre-approved credit offers. Thieves will intercept pre-approved credit offers in the mail and use the offer to open fraudulent accounts in your name. Visit optoutprescreen.com or call (888) 567-8688. You can opt out for five years via the website or you can opt out permanently via a paper form.
• Place a Security Freeze with the NCTUE and opt out of pre-approved offers of credit (National Consumer Telecom & Utilities Exchange). If you’ve never heard of the NCTUE, think credit bureaus but in relationship to your mobile phone or utilities service providers. You can visit https://www.nctue.com/Consumers to place the freeze and opt out of credit offers.

Please let me know if you have other questions related to financial fraud. I’d love to help be your thinking partner on this topic and help you protect yourself from financial fraud.

– Kaleb Paddock, CFP®

You can learn more about Ten Talents and Kaleb, a financial planner based in Parker, CO, here. Kaleb can be reached at (303) 961-4397 or Kaleb Paddock.