With Identity Fraud in Focus, we leverage our research and internal fraud data to provide insights so experts, organizations, and consumers can stay informed about emerging threats online.
Key discoveries:
Watch out for tax refund fraud
A scam prediction for 2023
The biggest scams from 2022
Top identity theft and fraud crimes from Q4
Watch out for tax refund fraud
Tax season is upon us, a time when scammers ramp up their efforts to steal personal information in order to file fraudulent tax returns.
Here at Allstate Identity Protection, tax refund fraud was the third-most reported fraud type in 2022. And we expect that trend to continue this year.
But just like with other forms of identity theft or fraud, it helps to be proactive and recognize the early warning signs, so you can keep your sensitive data and hard-earned money safe.
Click here to find out how tax-related identity theft occurs, and what you can do if a criminal steals your refund. Plus, get tips on how you can better protect yourself from tax refund fraud.
Quick takeaways | |
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$5.7B in tax fraud the IRS flagged in 20221 | 7.8M reports of suspicious tax-season activities in 20222 |
A scam prediction for 2023
Unfortunately, scams targeting specific ethnic groups and immigrants with limited English proficiency are predicted to increase, according to the Identity Theft Resource Center. That’s because these populations tend to have unique vulnerabilities:
Many recent immigrants send money to family members outside of the country using peer-to-peer (P2P) payment apps, which we know scammers exploit. Once money is sent, it’s virtually impossible to recover.
Trusting government officials takes time, and many scams start with a call, email, or text message from someone pretending to be from a government agency. This automatically places the victim in an uncomfortable position, especially if the caller is impersonating an immigration official. Scammers often use fear tactics to demand money or personal information.
The applications for many government benefits programs can be confusing, particularly for someone still learning the language. And some initiatives, like the student loan forgiveness program, have gone through changes. Is it blocked? Is it back on again? A language barrier can leave someone particularly vulnerable to misinformation.
As a Senior Customer Care Specialist at Allstate Identity Protection, Angelica Ramirez knows this all too well. A routine part of her job is assisting non-English-speaking members navigate tricky situations.
“Fraud disproportionately affects the most vulnerable populations, and it’s heartbreaking to hear these stories first hand,” says Ramirez. “We have unique tools and resources to help people identify scams, and we want to get the word out. Help is here.”
The biggest scams from 2022
Over the course of last year, we warned about a wide range of emerging scam types to help the public stay a step ahead. Here’s a quick recap of what we covered.
Student loan forgiveness scams >
Even though the Biden administration’s student loan forgiveness plan is currently held up in court, criminals are calling borrowers promising to help get a student loan discharged, forgiven, or canceled. These are scams. If the ruling that blocked student loan forgiveness gets overturned and the application process begins again, borrowers don’t have to pay to obtain relief. The application on the Federal Student Aid website is free.
Remote job scams >
Remote work has evolved from a temporary pandemic response to a permanent part of the business world, and bad actors are exploiting this to scam job seekers. In 2021, the FTC received over 104,000 consumer complaints about fake job opportunities, nearly three times the amount reported in 2019.3 Applying for a job directly on a company’s website is the best way to stay safe.
Crypto scams >
Americans lost more than $1 billion in cryptocurrency to scams over the last year, according to the FTC.4 And like money that’s sent electronically, once a payment is made in cryptocurrency, it’s difficult to recover. Learn more about what cryptocurrency is and how to spot a crypto scam, so you can protect yourself and those you love.
Romance scams >
Older Americans are being conned out of pensions or retirement funds as part of elaborate romance scams that target the most vulnerable. But we’ve also seen this type of confidence fraud increase across all age groups. And because victims can sometimes feel too embarrassed to speak up, these crimes often go unreported. Click here to find out how romance scams work, and what you can do if you suspect you’re a victim.
Scam texts and robocalls >
Robocalls with recorded sales messages that you haven’t given written permission to receive are not only annoying, they’re illegal. The same applies to text messages sent to a mobile phone using an autodialer unless you give consent or the message is sent for emergency purposes. Americans reported losing $131 million to fraud schemes initiated by text in 2021, per the FTC.5 Call-blocking apps that intercept spam calls and texts are the best defense. Click here to learn about 5 scam texts to watch out for.
Peer-to-peer (P2P) payment scams >
The speed and convenience of P2P apps are appealing to consumers, but it also exposes them to significant risks. P2P payment services offer no protection against scams, so if you send money for a product and don’t receive it, there’s very little you can do. In a 2022 survey by Morning Consult, 29% of respondents said they had either been a victim of a peer-to-peer payment scam or know someone who has. We recommend never sending or accepting P2P payments from strangers.
Here are the most common fraud types we saw in 2022, and what consumers can do to fight back.
Top identity theft and fraud crimes from Q4 2022
In Q4, we saw a 91% increase in government and tax fraud cases. This is a pattern we’ve closely monitored since Congress first enacted an expansion of the nation’s unemployment benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help Americans deal with the economic uncertainty caused by the pandemic. More than $60 billion may have been paid out in fraudulent unemployment insurance benefits during the Covid-19 pandemic, according to the US Government Accountability Office.6
Part of this increase is also related to the spike in fraudulent disability insurance claims in California, which caused the state to suspend 345,000 disability checks in January 2022.7
On a positive note, all other fraud types decreased in Q4, as well as the amount of overall dollars lost. While this is good news, we expect to see new digital fraud cases increase again as holiday shopping fraud totals are released. Holiday shopping fraud increased by 127% at the start of the 2022 holiday shopping season, and all signs suggest that continued through the end of the year.8
About Identity Fraud in Focus
With insights from millions of identity theft cases since the start of 2021, Identity Fraud in Focus provides the knowledge families need to stay safer online.
“Now more than ever, people need extra information, guidance, and support to navigate today’s threats to their security and privacy — so they can keep their families safe,” says Dustin Hofstein, Chief Service Officer of Allstate Identity Protection. “That’s why our quarterly Identity Fraud in Focus report is so important, so consumers, experts, and the media understand the latest digital threats. And what people can do to live more secure lives.”
1. IRS Criminal Investigation 2022 Annual Report
2. Identity Theft Tax Refund Fraud ISAC – 2022 Annual Report
3. AARP, “How to Recognize and Avoid Work from Home Scams,” June 22, 2022.
5. McGill, Margaret Harding, and Sara Fischer. “Americans Are Drowning in Spam.” Axios, 18 Apr. 2022.
7. LA Times, “California says most halted disability claims are fraudulent,” January 22, 2022.
