Prevent ID theft: Avoid financial scams

Follow best practices for safeguarding information to avoid scams.

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Key takeaways

  • Protect your personal information everywhere online and secure your mobile phone accounts with your phone provider.
  • Learn to recognize phishing emails and calls. Don't trust calls from individuals claiming to represent technical support, the IRS, or your financial institutions.
  • File your tax return as early as possible.

Being contacted by the Internal Revenue Service (IRS) can cause concern for any taxpayer, but imagine receiving a telephone call and hearing this:

"This prerecorded message is to notify you that the IRS has found fraud and misconduct on your tax return. This needs to be resolved immediately, and it's very important that I hear from you as soon as possible or a legal action will be taken against you."

That's an actual message received by a real taxpayer, and reported to the IRS—but everything about the call is fake. It's a criminal scam, aimed at scaring victims into placing a call to the scammer who might demand an immediate cash payment, or attempt to obtain personal information that could be used for identity theft.

With tax-filing season in full swing, intimidating calls of this type try to take advantage of taxpayers' IRS anxiety. Most people are quick to spot the call as a fake since the IRS doesn't threaten taxpayers by telephone, emails, or text messages, or issue arrest warrants.

5 common scams

1. Tax refund fraud

A criminal, having illegally obtained your Social Security number, files a fraudulent tax return in your name and collects a refund. When you submit your legitimate tax return, it is rejected because the IRS has already processed a return with your Social Security number. In some cases, you may receive a notice prior to filing your return that the IRS has received a suspicious return using your identity.

What to do:

  • File your return early, reducing the likelihood that a criminal would have previously filed a fraudulent return.
  • If your return is rejected because of a duplicate filing under your Social Security number, submit Form 14039, Identity Theft Affidavit, to the IRS.
  • Remember, the IRS will contact you through the US Postal Service, not a phone call. If you receive a letter from the IRS saying that it has received a suspicious return using your identity, visit to confirm the contact information before contacting the IRS.
  • Do not return a call from someone claiming to be with the IRS.
  • Visit Identity Theft Central for information about tax-related identity theft and data security protection from the IRS.
  • Continue to pay your taxes and file your legitimate tax return, although you may have to submit a paper return rather than an electronic one. Attach Form 14039, Identity Theft Affidavit, when filing your return.

2. Employment or health care fraud

A person uses your identity to obtain a job or receive health care services. You may become aware of the scheme after you file your tax return, and are notified by the IRS that you appear to have underreported your income and owe additional tax. Or, in the health care version of the scheme, you receive notification that you are required to pay for medical exams, procedures, and prescription drugs that you never received.

What to do:

  • If you suspect you are a victim of taxpayer identity theft, immediately contact the IRS and file Form 14039, Identity Theft Affidavit.
  • Never surrender Social Security, Medicare or health insurance numbers to anyone you don't know and trust.
  • If you believe someone has signed up for health insurance in your name, call the Health Insurance Marketplace call center at 800-318-2596, and explain the situation.

3. Tech support scam

You receive a phone call from someone claiming to be a technical support person, informing you that there is something wrong with your computer and the caller can help you fix the problem. Alternately, a message appears on your computer screen informing you that your computer is infected with viruses, or that you are locked out of your computer and your files have been encrypted, denying you access. If you follow the instructions of the caller or the screen message, your computer may be taken hostage and your personal information stolen. You are then asked to pay a fee to restore access to your computer or data.

What to do:

  • Prevention is the best medicine. Don't click pop-up ads or attachments from unknown senders. Avoid clicking links in emails. Visit known websites by manually typing the URLs in a browser.
  • Do not allow anyone to control your computer remotely and never give passwords and security codes to anyone on the phone.
  • Hang up if you receive a tech support call, and don't respond to scare messages about your computer being infected. If you need help with your computer, go to your local computer or electronics store.
  • Back up your data regularly. That way, you can reboot and regain control of your computer by cleaning your hard drive and reinstalling your operating system.

4. Credit card fraud

Someone using your identity signs up for a credit card and racks up large charges. A crook who obtains a new card could use it extensively before being discovered. Sometimes, a stolen identity is used to obtain personal loans or open unauthorized financial accounts. You will likely learn about this when bills are not paid and and you are contacted by collection agencies looking for payment.

You may notice either you are not getting any postal mail (due to address fraud or theft) or you start receiving confirmation or decline letters for credit cards or loans that you did not initiate.

What to do:

  • Report the crime and start a recovery plan on
  • Notify law enforcement officials.
  • Consider freezing your credit files if you do not have any plans to take new credit cards or loans. You can freeze and unfreeze your credit file for free.
  • Put a fraud alert on your credit reports, which notifies lenders and creditors that they should take extra steps to verify your identity before extending credit. Contact one of the 3 credit bureaus to report the crime (Equifax at 800-525-6285, Experian at 888-397-3742, or TransUnion at 800-680-7289).

5. Fake charities

You are solicited by email, phone, or in person to contribute to an organization that sounds like a good cause but is actually a scam. Such schemes may be general in nature, often using a name very similar to a well-known charity, or they may be more targeted, attempting to prey on people who are victims of a natural disaster or known to have a personal interest in a particular disease or social cause. These days, charity scams are also being circulated through social media posts such as Facebook, Twitter, WhatsApp, and LinkedIn.

What to do:

Keep good habits

Security measures aren't foolproof, and anybody can suffer a moment of inattention or lapse in judgment. Nevertheless, awareness and basic prevention practices can protect you from the vast majority of attempts to steal your identity or money through fraudulent schemes.

Learn what else you can do to protect yourself. Read Viewpoints on 4 tips to protect against identity theft

Next steps to consider

Safeguard important financial, legal, and personal documents.

Take action to enhance security on your Fidelity accounts.

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