4 Common Tax Scams in Australia

As Australians handle their financial duties, including filing tax returns and meeting various obligations, they face the ongoing threat of tax scams. However, there is a persistent threat of tax scams, as fraudsters continually develop more sophisticated methods to deceive and exploit unsuspecting taxpayers. These scams can lead to financial losses and impose considerable stress and disruption on victims’ lives.

In 2023, Australians lost over $14 million to tax scams, with phishing emails, phone scams, and SMS scams being the most common. Vigilance is crucial to safeguarding personal and financial information during this critical time.

Understanding Tax Scams

Tax scams are fraudulent schemes designed to deceive taxpayers into providing personal information, making payments, or divulging sensitive financial details under false pretenses. These scams often impersonate legitimate entities like the Australian Taxation Office (ATO) or myGov to trick individuals into believing their requests are genuine.

1. Impersonation Scams

Scammers frequently impersonate myGov through deceptive emails, aiming to trick recipients into divulging personal information or clicking on malicious links. These emails are crafted to closely resemble official myGov branding and language, employing various tactics to manipulate individuals.

Tactics Used by Scammers

• Fake Links: Emails contain links that redirect to counterfeit myGov websites designed to steal login credentials and personal details.
• Urgent Language: Scammers create urgency with phrases like “Immediate Action Required” or warnings of account lockouts, prompting immediate responses.
• Requests for Personal Information: Emails may request sensitive details such as tax file numbers or payment information under false pretenses of needing it for tax returns or issue resolution.

Identifying Genuine myGov Emails vs. Scams

• Check Sender’s Email Address: Legitimate myGov emails originate from addresses ending in .gov.au. Scammers often use similar addresses with slight alterations or generic domains.
• Look for Personalisation: Genuine emails typically address recipients by name, whereas scams often use generic greetings like “Dear Customer.”
• Verify Links: Hover over links to verify URLs. Legitimate myGov links direct to official .gov.au websites.
• Avoid Sharing Sensitive Information: Official myGov communications never request sensitive information or payment details via email.

ATO Social Media Impersonation Scams

Fraudsters create fake ATO social media accounts to deceive taxpayers into believing they’re interacting with the official tax office, offering misleading advice or requesting personal information under the guise of providing tax assistance.

Deceptive Methods Used

• Offering Fake Tax Advice: Scammers post deceptive tax guidance to build trust and encourage engagement.
• Requesting Personal Details: Fake accounts solicit personal information or payment details from individuals, purportedly to resolve tax-related issues.
• Promising Quick Refunds: Fraudsters entice victims with promises of expedited tax refunds in exchange for fees or personal information.

Tips for Verifying Official ATO Social Media Accounts

• Verification Badges: Genuine ATO accounts display blue verification badges next to their names on social media platforms.
• Check Follower Count and Activity: Legitimate accounts boast substantial followings and regular updates, whereas fake ones often have minimal followers and sporadic posts.
• Cross-Reference Information: Verify any information received on social media by visiting the official ATO website or contacting them directly through official channels.
• Report Suspicious Accounts: If you encounter a suspicious ATO account on social media, report it to the platform and refrain from interacting with it.

2. Multi-factor Authentication (MFA)

Multifactor Authentication (MFA) enhances account security by requiring users to provide multiple verification factors, such as passwords, smartphones, or biometrics like fingerprints. Despite its benefits, scammers exploit MFA processes through various deceptive tactics.

Scammers employ fake authentication requests or phishing messages that appear to originate from legitimate services. These prompts trick users into divulging their MFA codes or clicking on malicious links. Additionally, fraudsters send emails or text messages posing as trusted organisations, claiming there’s an account issue requiring immediate resolution via MFA codes. They also create spoofed login pages resembling legitimate sites to capture users’ credentials and MFA codes for unauthorised access.

To safeguard against MFA phishing scams:

• Verify Requests Through Official Channels: Always authenticate MFA requests directly via official channels. Contact the organisation using verified contact details from their official website.
• Exercise Caution with Unexpected Requests: Be vigilant of unexpected MFA prompts, especially if you haven’t initiated any logins. Scammers often exploit urgency to prompt hasty actions.
• Verify Sender Information: Check sender email addresses or phone numbers for legitimacy. Genuine requests come from official domains and contact numbers.
• Use Authenticator Apps: Opt for authenticator apps over SMS for MFA, as they offer higher security and are less vulnerable to interception.
• Enable Account Notifications: Activate notifications for account activities to monitor unauthorised login attempts or account changes promptly.
• Stay Informed on Phishing Risks: Educate yourself about evolving phishing techniques and scams to bolster awareness and protect against fraudulent activities.

3. Tax Refund Scams

Tax refund SMS scams involve fraudsters sending deceptive text messages that falsely promise recipients a tax refund from the Australian Taxation Office (ATO). These messages are crafted to trick individuals into divulging personal information or clicking on malicious links.

These SMS scams often include links to counterfeit ATO websites designed to appear legitimate, but their purpose is to steal personal details. They use urgent language such as “Immediate action required” or “Claim your refund now” to create a sense of urgency. The links in these messages are often shortened to obscure the actual destination URL, making it difficult to identify them as scams. The fake websites may request personal information, tax file numbers, or banking details.

If you receive a suspicious SMS claiming to be from the ATO:

• Avoid clicking on any links included in the message.
• Verify the legitimacy of the message by contacting the ATO directly using official contact information from their website.
• Report the scam to both the ATO and Scamwatch to help prevent others from falling victim.
• Delete the message from your phone to avoid accidental clicks on malicious links in the future.

4. Tax Lodgement Email Scams

Tax lodgement email scams involve fraudsters sending deceptive emails posing as the ATO, urging recipients to lodge their tax returns or addressing supposed issues with their lodgement. These emails typically aim to extract personal and financial information or infect the recipient’s device with malware.

These scam emails often mimic official ATO branding and logos to appear authentic. They may employ urgent language, claiming immediate action is necessary to avoid penalties or expedite a refund. Links within the emails lead to counterfeit ATO websites, and attachments, supposedly containing forms or additional details, often harbor malware.

To distinguish between a legitimate ATO email and a scam, consider the following tips: Genuine ATO emails originate from addresses ending in @ato.gov.au. They address recipients personally by their full name or business name, avoiding generic terms like “Dear Customer.” The ATO never solicits personal information, passwords, or banking details via email. Always hover over links to verify URLs and exercise caution with unexpected attachments.

What to Do If You’ve Been Scammed

Immediate Actions to Take If You Suspect You’re a Victim

• Cease Communication: Immediately stop all communication with the scammer.
• Secure Your Accounts: Change passwords and enable MFA on affected accounts.
• Check Financial Statements: Review bank and credit card statements for unauthorised transactions and report any suspicious activity to your financial institution.

Reporting the Scam to Authorities

• Contact the ATO: Report the scam to the ATO through their official website or by calling their fraud hotline.
• Notify the ACCC: Report the incident to the Australian Competition and Consumer Commission (ACCC) via their Scamwatch website.
• Local Law Enforcement: Depending on the severity of the scam, you may also need to report the incident to your local police.

Resources for Support and Recovery

• IDCARE: Utilise IDCARE, Australia’s national identity and cyber support service, for personalised support in managing the impact of identity theft.
• gov.au: Visit the Australian Cyber Security Centre’s website for information on how to recover from a cyber incident.
• Financial Institutions: Contact your bank or credit card provider for assistance with securing your accounts and reversing fraudulent transactions.

By following these steps and utilising available resources, you can protect yourself from tax scams and take swift action to mitigate any harm if you fall victim.

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Disclaimer

This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations.?Contact us?today to embark on a path of informed and customised tax planning for your property investments.