Tag Archive for: tax fraud

Identity Theft of H&R Block Customers | Sileo Group

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The number of identity theft victims rose 22% last year! Although it’s important to always protect your identity, tax season makes people more vulnerable to this crime and you should be especially cautious.

H&R Block identity Theft

A recent article in the New York Times uncovers an H&R Block office in the Bronx that was infiltrated by identity thieves (apparently it was not the only office affected).

Last year, Kevin Johns, a construction worker in the Bronx, did his taxes at the H&R Block store on Riverdale Avenue that he had used for the past 20 years or so. The next day, though, he got a call from the tax preparer: his return was rejected because he had already filed. Or at least, someone had filed in his name. That someone helped himself or herself to a $8,499 refund.

Sharon Hawa, a disaster-relief coordinator with the Red Cross and another longtime customer at the same office, had a similar experience. Ms. Hawa said she went to have her taxes done, only to be told that someone had already e-filed her taxes and collected $6,145.

Both Ms. Hawa and Mr. Johns said they were told by police detectives investigating their cases that at least 20 customers of the branch and possibly many more had been robbed by identity thieves who were very likely H&R Block employees. Both said the fraudulent filers used their previous year’s adjusted gross incomes as proof of identity.

Top Tips for Tax Time Identity Theft Protection Safe Preparation

Your greatest risk of identity theft during tax season comes from your tax preparer. In this case it was because they are dishonest, but sometimes it is because they are careless with your sensitive documents. Just ask yourself how easy it would be for your tax preparer or anyone in their office to walk off with a few client folders containing mounds of profitable identity. Here are a few effective solutions:

Choose your preparer wisely

How well do you know the person and company preparing your taxes? Did they come personally recommended, or could they be earning cash on the side by selling your personal information. Do they have an established record and are they recommended by the Better Business Bureau? Don’t be afraid to ask for references.

Interview your preparer before you turn over sensitive information. Ask them exactly how they protect your privacy (do they have a strong privacy policy?). Are they meeting with you in a room full of client files, or do they take you to a neutral, data-free, conference room or office? Do they leave files out on their desk for the cleaning service to access at night, or do they lock your documents in a filing cabinet or behind a secure office door? Do they protect their computers with everything listed in the next section?

Asking professional tax preparers these questions sends them a message that you are watching. Identity thieves tend to stay away from people they know are actively monitoring for fraud. Remember, losing your identity inside of their accounting or bookkeeping business poses a tremendous legal liability to their livelihood. When it comes to the case with H&R Block it causes a huge loss of clients due to a damaged reputation.

John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.

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Top Tips to Stop Tax Time Identity Theft

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If you receive my newsletter, you’ve already seen this article on identity theft during tax season, but I thought I would re-post it here.

Tax time is like Christmas for identity thieves. Our personal information sits out on desks (ours and our tax preparer’s), is mailed improperly, emailed incorrectly and stored unsafely. And to top it all off, we are used to giving our personal data away during tax time, and therefore preconditioned not to give the risks much thought. It’s time to think about it.

Top Tips for Tax Time Identity Theft Protection

Safe Preparation. If you use a tax preparer, understand how they protect your privacy. Do they leave files out on their desk for the cleaning service to access at night, or do they lock your documents in a filing cabinet or behind a secure office door? Do they protect their computers with everything listed in the second tip below? How well do you know the person and company preparing your taxes? Did they come personally recommended, or could they be earning cash on the side by selling your personal information. Asking professional tax preparers these questions directly sets an excellent standard for your relationship. They should be able to answer them without pause. If they know that you are aware that tax documents attract identity thieves, they will probably be more careful with your information. Remember, losing your identity inside of their accounting or bookkeeping business poses a tremendous legal liability to their livelihood.

Secure Computers. Last year, more than 77 million Americans filed their tax returns electronically. To prevent electronic identity theft, you must take the necessary steps to protect your computer, network and wireless connection. Have a trusted computer security professional help you implement the 7 steps to a system lock-down (Passwords, Anti-virus/Anti-spyware, Encryption, Automatic Operating System Updates, Secure Wireless Networks, Firewalls and Mobile Computing Devices) and make sure that your tax preparer does the same. Also, make sure that all peer-to-peer networking is turned off or configured to disable the sharing of your personal folders (so that the identity thief can’t download your tax return). Lock all PDF printouts of tax documents with a password (a feature available in Adobe PDF products).

Don’t Buy it! If someone promises you (by phone, fax, mail, or in person) to drastically reduce your tax bill or speed up your tax return, don’t believe them until you have done your homework (call the IRS directly if you have to). Anytime someone is promising too much (bigger refunds, faster service), or threatens you (e.g., “the IRS will come after you if you don’t do this”), your instincts should warn you that they are probably trying to get information out of you by playing on your desire to get something for nothing, and your desire to avoid confrontation. This is especially apparent with the new economic stimulus tax-time checks that go into effect this May. If anyone asks you for information in order to send you your check, they are scamming for your identity. The IRS already knows where you live (and where to send your rebate)!

Mail Safely. If you are sending your tax return through the mail, make sure to carry it inside of the post office and send it by certified mail so that you know it has arrived safely. Too much mail is stolen out of the blue USPS mailboxes and driveway mailboxes that we use for everything else. Don’t email any private information to your tax preparer or spouse unless you are very comfortable with how to encrypt email. If you don’t know how to encrypt, don’t count on email as a secure form of communication. If you don’t want it published in the newspaper, don’t put it in an email.

Shred and Store Safely. Any copies of tax documents that you no longer need can be shredded using a confetti shredder. Store all tax records, documents and related materials in a secure fire safe. I recommend spending the extra money to have your Sentry Safe bolted into your home so that a thief can’t walk away with your entire identity portfolio. Make sure that your tax provider appropriately destroys and locks up any lingering pieces of your identity as well.

Your tax records are one of the most comprehensive and complete collections of your identity. Don’t take the threat of them disappearing too lightly.

John Sileo
Identity Theft Speaker