How To Protect Yourself Against Tax Refund Scams 🔒
Who doesn’t love getting a tax refund 🧾?
In today’s world of soaring inflation and rising cost of living 📈, it can be a much-needed financial boost and a welcome relief for individuals and families alike.
Whether it’s a small windfall or a substantial sum, a tax refund can provide some breathing room in budgeting and allow for tackling essential expenses or even treating yourself 🏖️.
In this article we’ll be looking at third-party tax scams and what steps you can take to protect yourself.
But first we have a quick word from Connor from our Paraplanning team (the technical ones 🧮), “A few of our clients have been in touch after being approached by these scammers, asking about how to handle it or whether they should trust it. And I’d like to just assure everyone that they can get in contact with the Joslin Rhodes Team and we’d all be happy to help in any way possible. If you’re ever unsure about a financial matter, we’re always here to help and offer our advice.”
So, What Actually Are These Scams?
Tax refund scams are deceptive schemes where companies or individuals pretend to help you get money you’re owed from taxes, but instead, they take a big portion of it for themselves 🚫.
They promise huge tax refunds or guaranteed access to money you didn’t know you had. However, these scammers often charge high fees or take a large percentage of the refund as their ‘service fee’, leaving you with much less money than you expected or even no refund at all 😬.
These scams target people who may not be familiar with tax laws or who are vulnerable, so it’s important to be careful and sceptical of offers that sound too good to be true.
It’s always wise to seek advice from trusted professionals and report any suspicious 🤨 activities to the authorities, such as Citizens Advice (here’s a handy link to their website 👉 Citizens Advice)
A lot of the time these scammers 👨💻 will pretend to be His Majesty’s Revenue & Customs (HMRC). Their communications (emails, letters ✉️) make use of similar fonts, colours and more, to disguise 🦝 themselves. It’s vital for you to check the email and/or phone numbers match those listed on the official HMRC website. Also never click any of the links in the emails .
Clicking on these links can endanger your computer’s security and result in data theft or unauthorised access to your personal information 🖱️.
Spam emails often promote scams and fraudulent activities, aiming to deceive you into providing sensitive information or participating in fraudulent schemes.
The sources of spam emails are typically unreliable, and the links may lead to unverified websites that can spread misinformation or unwanted content 👎.
To stay safe, it’s best to avoid clicking on links in these spam emails 🔗, mark them as spam, and verify any suspicious emails or links through official channels. Official channels can include phone numbers and email addresses that are provided on the organisation’s website. And you can also find trusted channels through previous forms of communication, whether that’s emails, letters or phone calls.
What’s a Third-Party Tax Refund Company?
Third-party tax refund companies are organisations specialising in supposedly helping you submit a tax repayment claim.
However these companies don’t work for free, they’ll charge a minimum fee 💰 that sometimes can be up to 40 or 50% of the money claimed through your tax refund.
These huge fees can massively affect the benefits you’ll see from your tax refunds 📝.
A case covered on consumer website Which.co.uk, reported on a couple who were eligible for a rebate of £650 but once the cheque arrived it was for only £360. These huge fees can have a significant impact upon the money you’re owed, so before working with a third party company it’s important to understand the agreement and what both parties will receive 🤝.
Third-party companies will also often claim to be ‘HMRC Approved Agents‘ but this just isn’t true. HMRC works on a first-come, first-served basis and doesn’t favour any individual or company.
Tax refund companies offer a seemingly easy hassle-free way of claiming your tax refunds. However the process is usually pretty straightforward to claim yourself. It’s always worth giving it a go before going to a third-party. To claim a tax refund you can use the Government’s website 👉 here, for a guide on how to claim.
Well, What Do I Need To Be Looking Out For?
Over to our Paraplanner Connor, to answer this question.
“There are a few signs you need to be looking out for but if you’re ever unsure it’s always worth checking.”
- Be wary of big promises 🤝: Be wary of anyone who guarantees you a huge tax refund or a specific amount of money. If it sounds too good to be true, it probably is.
- Check the fees 💰: Pay attention to the fees charged by so called ‘tax assistance’ companies. If the fees seem very high or a large percentage of the refund, be cautious.
- Protect your information 🔒: Be extremely careful about sharing personal and financial information. Only provide it to trusted professionals and only after verifying their credentials.
- Verify credentials ✅: Make sure the tax assistance provider is legitimate by checking their credentials and licensing. If you need further help or guidance Get Safe Online is the UK’s leading internet safety website. They provide unbiased, factual and easy-to-understand information on online safety. If you’d like to get in touch with Get Safe Online today click 👉 here
- Avoid pressure tactics 🏃♂️: Don’t fall for high-pressure tactics that create a sense of urgency. Take your time, do your research, and make informed decisions.
- Get it in writing 🖊️: Ask for clear explanations, written documentation, and contracts. Legitimate providers will be transparent and provide the necessary paperwork.
- Seek referrals 👀: Ask for recommendations from trusted sources, such as friends, family, or reputable professionals.
“Remember, if something doesn’t feel right or seems suspicious, you can always get in touch with us on 01642 52 55 11. Better safe than sorry.”
What Are Some Examples Of Misleading Practices?
Recent reports have highlighted cases where couples mistakenly believed they were dealing directly with HMRC when making their marriage allowance claims through a company called Marriage Allowance Claims Ltd 👰.
The company’s website and paperwork featured fonts, headers, and colour schemes like those used by HMRC, potentially misleading claimants into thinking they were dealing with the Government agency. This lack of clarity has resulted in some claimants losing a significant portion of their entitled refunds.
“We thought we were dealing with HMRC”
Marriage allowance claimants lose nearly half of their tax refund because they thought they were dealing with HMRC.
A story found on which.co.uk talked about David and his wife, Anne (not their real names), and their experience with a marriage allowance claim scam.
David and Anne didn’t realise they’d signed up to Marriage Allowance Claims Ltd until HMRC informed them their claim had been successful.
David told Which:
“My wife responded to one of its Marriage Allowance Claims Ltd Facebook posts 📱, which said “click here to check your eligibility for a married person’s allowance rebate,” David says. “It was a couple of months before Christmas 🎅 and finances are usually quite tight, so we would have been grateful for the extra money. She clicked the link, put in our details and was told we’d be eligible for a rebate of up to £950.”
The website prompted Anne to press a button to request forms to be sent to them. Receiving them a few days later, she filled out their details and sent them back.
Several weeks later, Anne received a letter from HMRC to say their claim had been processed and a cheque for £650 would be issued.
“When Christmas had passed and we still had not heard anything further, I contacted HMRC to ask about the progress of our claim,” says David. “I was told the cheque had already been issued to a third-party company and we would have to contact them.”
“This came as a shock to us, as we thought we were dealing with HMRC the whole time.”
David says he admits he perhaps didn’t engage the issue with due diligence, but also claims that Marriage Allowance Claims Ltd had used fonts and headers very similar to those used in HMRC’s documents (as seen in the image above).
“Once our cheque arrived it was for £360. Whenever I think about it I feel angry and frustrated 😠.”
Marriage allowance claims can be made for free from HMRC’s website. And on top of it being free, it’s also a simple process to make your application. You can apply here.
In the image above you can see an example of a scam email 📧. In this email you can see how the fonts, text, images and name have been manipulated to trick the reader. And it’s not hard to understand how someone could fall for this scam.
In the email you can see how the sender has used the Government logo, to trick the reader into believing they are the Government. On top of this they also signed off as GOV.UK.
However, there are some tell-tale signs you shouldn’t trust the sender ❌. The name associated with this email address is ‘Government Gateway-HMRC‘. This name is not official.
If you’re ever unsure of if a HMRC email address is real, it is recommended to check a list of recent emails from HMRC to help you decide if the email you’ve received is a scam.
What Should I Do If I Fall Victim To The Scam?
We’ll now hand it back over to Connor, to give his advice and top tips:
- “Cut off any communication 🚫: So, if you find yourself dealing with a scammer, the first thing you should do is cut off all communication with the fraudulent company or individual. Just put an end to those phone calls, stop those emails or messages, and avoid any further financial transactions with them.”
- “Keep the evidence 📄: It’s really important to hold onto any evidence related to the scam. Save those emails, text messages, or any other form of communication you’ve had with the scammer. These records can be really useful when you report the incident and can even help with any investigations that follow.”
- “Report the scam 🌐: Make sure you report the scam to the appropriate authorities. Get in touch with the Government through their official website, gov.uk, and provide them with all the relevant information. Give them details about the scammer, share your communication records, and let them know about any financial transactions you’ve made.”
- “Notify financial institutions 🛎️: If you’ve given the scammer sensitive financial information, it’s crucial to contact your bank or credit card company right away. Inform them about the fraudulent activity you’ve encountered. By doing so, you can help prevent any further unauthorised transactions and protect your accounts from harm.”
- “Monitor credit and identity 👀: Scammers sometimes use stolen personal information for identity theft or other fraudulent activities. That’s why it’s important to keep an eye on your credit reports and financial accounts on a regular basis. You might want to consider placing a fraud alert or freeze on your credit to add an extra layer of protection.”
- “Educate others 👨🏫: Sharing your experience with your loved ones, friends, and even the wider community can make a real difference. By raising awareness about the scam, you can help prevent others from becoming victims. Take advantage of social media, community forums, or local consumer protection services to share the information you have. Citizens Advice are a local consumer protection service that will learn from the information you provide them and use it to stop others falling for similar scams. To report a scam click 👉 here“
Remember, it’s crucial to act fast and get assistance from the appropriate authorities and financial institutions to minimise the potential damage caused by the scam.
If you’d like to speak to us about any concerns you have get in touch on 01642 52 55 11 and our team of experts will be happy to help.
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