Stimulus Payment Scams To Watch Out For

background, no people.
JJ Gouin / Getty Images/iStockphoto

In the summer of 2021, the IRS issued warnings about a new wave of stimulus scams, this one coinciding with the completion of the third round of payments that came from the American Rescue Plan. Fraudsters were sending out texts and emails telling their marks that they were eligible for a “stimulus payment” — and all they had to do to collect was click a link with a sketchy URL and offer up some personal information.

In reality, it was nothing new.

Beware: Student Loan Forgiveness Scams on the Rise — Avoid Being a Victim of FraudSocial Security Scams: 3 Common Requests and How To Report Them

Some variation of that swindle had been going on since the CARES Act delivered the first round of payments in 2020. But the American Rescue Plan Act was the biggest spending bill in history — irresistible to thieves — and as the size of the pot grew, so, too, did the number of scammers looking to rob every penny of it.

Building Wealth

Now that it’s time to settle up with the IRS for 2021, it’s important to be extra vigilant as cybercrooks launch a new round of attacks that blend traditional IRS scams with new-school stimulus fraud.

For Scammers, the Last Two Years Have Been a Gold Mine

The last two years have seen an unprecedented transfer of wealth from the government to the people — and countless scammers positioned themselves in the middle to siphon off every possible dollar for themselves.

By the time 2021 was winding down, scammers had stolen more than a half-billion dollars — $586 million, to be exact — since the beginning of the pandemic, according to CNBC. The typical victim lost $392.

While pandemic scams have steadily declined, the arrival of tax season has breathed new life into the criminal elements lurking in the cyber shadows with plans to steal your identity, your money and your benefits — but they start by stealing your trust.

Building Wealth

These are the scams to watch out for. 

Text Message Scams Are Especially Common

In early February, the IRS updated its warnings about the scams taxpayers were most likely to encounter during tax season, and the most common of them all come via text message. Criminals are currently targeting smartphones with texts that mention either COVID-19, “stimulus payments” or both. The texts commonly include a bogus link that claims to be an IRS URL.

Old-Fashioned Phone Scams Are Bilking Taxpayers, Too

The IRS also warned people to be on the lookout for incoming calls that spoof IRS phone numbers on the victim’s caller ID. The caller purports to be an IRS agent and leaves an aggressive or threatening message demanding immediate payment for an outstanding tax bill or improperly received stimulus payment. They sometimes even threaten arrest.

Phone scammers have also been posing as representatives from local sheriff’s departments, your state’s department of motor vehicles or a federal agency.

Email Scams Run the Gamut but Include Common Elements

Throughout the pandemic, fraudsters launched email phishing campaigns purporting to come from the IRS or other agencies regarding COVID-19 stimulus payments. The language and pretext of the message varied, but the common traits of these scams include an urgent tone, an attempt to convince targets that they owe money or are owed money and must act now, and a link claiming to be from the IRS or another familiar agency.

Building Wealth

Unemployment Scammers Claim Benefits on Your Behalf

The expanded unemployment payments that were part of the COVID-19-relief programs from the beginning of the pandemic proved to be an especially juicy target for scammers. The IRS warns workers this year to be on the lookout for Form 1099-G documents outlining unemployment payments that they didn’t apply for or receive.

Unemployment scams are especially harmful because jobless payments count as taxable income. If identity thieves fraudulently apply for and receive benefits on your behalf, you’ll get stuck paying taxes on the money they stole.

Social Security Scammers Want Your Most Valuable Number

Another common tax-time warning comes from the Federal Trade Commission (FTC) — the Social Security number scam. In this ruse, fraudsters might use text messages, emails, phone calls or some version of all three, but the purpose is always the same — to get you to give up your Social Security number. In many cases, they’ll say your Social Security number has been used in a crime and they need it to keep you safe, or that they need your Social Security number to help you get stimulus money that you’re entitled to collect.

More From GOBankingRates

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.

Best Bank Accounts of July 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.