This article was first published by Truewealth Publishing.
People are looking to steal your money. It’s an unfortunate fact. You can protect yourself by learning how they try.
The scam I’m about to tell you about is from the U.S. But the approach is similar to lots of other frauds – regardless of language or country – and plays on some basic human instincts.
The Call
Well after midnight one evening last week, my U.S. phone rang, with the caller ID showing a number in New York. (I keep a U.S. phone number because my provider offers free international roaming and data – unlike my Singapore mobile services provider.)
It was about to be a bad rest of the night.
Most of the friends, family and former colleagues who have my U.S. phone number also know that I live in Singapore – and that their morning is my night. So most of the calls I get on this phone are marketing-related (“You’ve already won a trip to Disneyland!”) or a wrong number.
This late-night call was instead a robot-sounding recording. “We are calling about a lawsuit which has been filed on your name, so before we go with legal matter and send this case to the local county courthouse, kindly call us back on our number which is [number]. I repeat it [number]. Thank you and goodbye.”
The message seemed “off” and didn’t feel right because 1) Why would a recording be informing me of a lawsuit; and 2) A recording from an actual institution involved with a lawsuit would not use colloquial or grammatically incorrect language – “…before we go with” sounds like we’re making plans to meet up for a beer (after already having a drink or two). And “… call us back on our number…” – in American (English), people call you “at” a number, not “on” a number.
Still (my late-night brain pondered), what if this was something real? Basing a decision on the smoothness of a government organisation’s communication (American or otherwise) is a terrible idea. And it would be bad to (for example) be arrested upon entering the United States due to a pending lawsuit (improbable, but you never know) that I didn’t follow up on because I was sniffy about an automated recording’s lousy grammar.
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The Scam
So I called back, and a gentleman who identified himself as “Alex Brown” answered the phone. The background hum sounded like a bustling office. “Alex Brown” told me that he was an investigation officer in a scary-sounding division of the IRS. (The Internal Revenue Service (IRS) is the American tax collection agency.) He told me his “agent number” and confirmed my mailing address. Then “Alex” got into the meat of it.
“We have contacted you via mail three times, but you have not responded,” Alex told me. “This call is to tell you that the IRS is opening a lawsuit against you because you have been frauding the U.S. government. You are guilty of tax evasion.”
These are the words that nightmares are made of – even if you know that you’ve done nothing wrong. Letters get lost in the mail. And you could spend a lot of time, money, sweat and blood proving your innocence.
3 Suspicious Things About The Call
But a few things tempered my concern:
1. “Alex Brown” sounds like an “All-American”-type name. I think of a guy wearing khaki pants and a polo shirt at the tennis club. Or someone who’s dropping his kid off for piano lessons in a lightly wooded suburb of Chicago.
This “Alex Brown” had a heavy accent that could have been Middle Eastern or southeast Asian. Maybe he had “localised” his name. Or maybe it wasn’t his name at all. But he was as credible as I would be if I phoned someone here, calling myself Kelvin Tan and speaking in broken Mandarin with a thick American accent, claiming to be from IRAS (the Singapore tax service).
2. Grammar (again). One of the first terms that an investigative officer with the IRS would learn (I’m guessing) is the different forms of the word “fraud.” “Defrauding” is a verb. “Frauding” is not.
3. Governments are usually careful about how they say things. The tax man would not tell me within the first ten seconds of our conversation that I’m guilty of tax evasion. I imagine that he’d tell me that I need to submit additional paperwork, answer a few questions, provide documentation, etc. before aggressively accusing me of something. And that he’d mail me a long time before he’d call me.
While I was chatting with “Alex Brown,” I did a quick web search of the “agent number” that he had given me. With a minor wave of relief, I discovered that I was not the first person who had been contacted by “Alex Brown.” Dozens of people had a similar kind of conversation and reported it on various scam-exposing websites, reporting the same identifying name and agent number. (I wonder why “Alex Brown” used the same, easily searchable, “agent number” and the same name.)
In fact, “Alex’s” scam has been around for a few years. Had he not hung up on me (after I mentioned that I had found him online), he would have eventually offered me the opportunity to pay now to make the problem of my “frauding” go away.
According to the IRS, as of February, 5,000 people have been ripped off for a total of US$26.5 million in this scam. (My friend Steve Sjuggerud wrote about his experience with this scam here.)
This scam was transparently bogus in a lot of ways, but it had a few touches of sophistication. The caller ID number that showed up on my phone was credible. They had tracked down my mailing address. And – as if to address one possible objection – “Alex Brown” told me specifically not to disclose any financial information to him.
I can understand why thousands of people – probably terrified that the IRS was after them – fell for it. (The scam apparently targets immigrants, who may be unfamiliar with the IRS and even more wary.)
There are cheaters and scammers everywhere. Learning how they work is the first step to protecting yourself from them.
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This article was first published by Kim Iskyan at Truewealth Publishing, an independent investment research firm focused on taking the mystery out of finance and investing. We want to empower investors to make better and more profitable investment decisions on their own.
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