The lingering uncertainty surrounding the second round of stimulus payments creates the perfect storm for fraudsters trying to make a dishonest dollar. Better Business Bureau (BBB) Serving Western Virginia warns our area of scammers looking to steal your economic impact payments. BBB offers tips to avoid falling victim to these stimulus swindles.
According to the Federal Trade Commission (FTC), Americans lost over $211 million to COVID-19 scams and stimulus payment fraud.
Since January 2020, the FTC has received over 275,600 complaints and BBB Scam Tracker reports 1,477 COVID-19 related scams filed across the United States. While fraud activity has decreased from the highs recorded earlier in the year, it is expected to pick back up now that the $900 billion pandemic relief package, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, has been signed into law.
As part of the COVID-related Tax Relief Act of 2020, the federal government will provide a second round of stimulus payments to eligible recipients.
Residents can receive up to $600 per individual, including dependent children under age 17, if you’re an individual who earned less than $75,000 ($150,000 for those married filing jointly) in 2019. Stimulus payments start to phase out if you earned more than that, stopping completely for those with adjusted gross incomes of $87,000 or more ($174,000 for married couples).
“There will certainly be bad actors looking to take advantage of desperation and uncertainty surrounding the second stimulus check,” says Julie Wheeler, President and CEO of BBB Serving Western Virginia. “Be wary of any communication including phone calls, texts, and emails, claiming to be from your bank or a government agency like the IRS with requests for personal information or claims about receiving your money early. It’s a scam,” says Wheeler.
If you are eligible to receive a payment, you may receive the funds in one of these ways:
- Automatic deposit: If you are eligible for a payment, your payment will be deposited directly into the same account used when you filed your 2019 tax return and/or the account number used in the previous stimulus payment program. The payment will appear in your account summary as “IRS TREAS 310 XXTAXEIP2” or something similar. The IRS has a website where you can check your payment status. This link is likely to be frequently updated.
- Paper check in the mail: The IRS is expected to initiate direct deposits of stimulus payments before Thursday, December 31, 2020, and send out paper checks and debit cards by Jan. 15, 2021. If you did not give the IRS your direct deposit account information through your federal tax return in the last two years and have not provided the IRS with your information as a non-filer, you will likely receive a US Treasury check. The check will be mailed to the address on file at the IRS from the prior-year tax return.
Warning Signs & Tips to Avoid Stimulus Check Scams:
Beware of unsolicited calls or emails. Spoofing technology has made it easier than ever for scammers to impersonate anyone, including government agencies. Avoid picking up any calls from unfamiliar phone numbers.
Avoid messages that ask to “verify” or provide information.
When it comes to emails and text messages, consumers should be leery of any that have instructions encouraging them to click a link to “request benefit payments.” The IRS will not call, text, or email anyone to verify their information.
BBB Scam Tracker has found that a common stimulus check scam occurs when you receive an email or message asking you to click on a link that takes you to a bogus application to fill out to “make sure you are getting all the payments owed to you.” But this is typically just a way for fraudsters to gain your personal details and opens you up to identity theft.
Ignore high-pressure tactics. It is a red flag if someone calls or messages you saying they need sensitive information immediately or threaten that you will lose your stimulus payment if immediate action is not taken. Do not allow yourself to be rushed into anything or giving away any information. Take your time and do your research.
Avoid payment and fees. A common scam that popped up during the last round of stimulus checks is fraudsters offering payments faster, or even additional funds, for a small “processing fee” — typically using a prepaid debit or gift card, according to BBB Scam Tracker.
There has also been an uptick in cash advance offers at a very high-interest rate that adds up to be much higher than the stimulus check. If anyone offers a cash advance on your stimulus check, be very aware of that offer’s underlying terms and conditions.
Avoid fake lookalike checks. Phony checks are likely to re-emerge during the second round of stimulus payments. Typically, the scam starts when a recipient receives a check and deposits it in their bank account. The fraudsters then reach out and let them know that the amount was incorrect and ask them to return the overpaid funds.
To protect yourself, the BBB recommends doing your research to make sure the check is real and double-check if the government agency or organization issuing the payment actually exists. Scammers often make up names of agencies and/or grants that resemble or are similar to legitimate agencies.
Tips to Spot a Government Imposter Scam:
- Stay calm. If you receive any of these impostor calls, resist the urge to act immediately, no matter how dramatic the story. Scammers try to get you to act before you have a chance to think.
- Don’t reply directly. Do not respond to the call, text, or email. If you think the message may be real, find the government agencies’ contact information on their website and contact them directly.
- Check for look-alikes. Be sure to do your research and see if a government agency or organization actually exists. Scammers often make up names of agencies and/or grants that resemble or are similar to legitimate agencies.
- Do not pay any money for a “free” government grant or program. If you are asked to pay money to claim a “free” government grant, it is not free. A real government agency will not ask you to pay an advanced processing fee. The only official list of all U.S. federal grant-making agencies is Grants.gov.
BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. BBB services to consumers are free. BBB provides objective advice, BBB Business Profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, alerts, and educational information on topics affecting marketplace trust. There are local, independent BBBs across the United States, Canada, and Mexico, including BBB Serving Western Virginia, founded in 1940 and serving 32 counties in Virginia. Visit bbb.org for more information.
