Identity Theft and Fraud: It can happen to anyone

Identity Theft and Fraud It can happen to anyoneBy Richard A. McGrath, CIC, LIA

A recent study conducted by analysts at WalletHub, found that your level of vulnerability to identity theft and fraud may actually depend on what state you live in. According to the study, Massachusetts was ranked as the fourth highest state overall, and tied for the highest average loss amount due to online identity theft. However, it’s important to remember that anyone can become a victim of fraud or identity theft, regardless of what state you live in, even people who work in the insurance industry.

To prove my point, I’ve asked employees at McGrath Insurance to share their own experiences with fraud and identity theft. The names of employees and their family members who have shared their personal stories have been left out for privacy reasons.

The Grandparent Scam

One McGrath employee shared a story about her sister-in-law who almost became a victim of fraud. The woman received a phone call from a scammer asking to speak to “his grandmother.” Unable to reach who he originally wanted, the scammer then claimed to be the woman’s nephew. He said that he needed $4,000 to make bail from jail after being arrested while driving around with a friend who had drugs in the car. The scammer told her not to say anything about the arrest to his parents because he was nervous about their reactions. He then asked for her bank account information, but fortunately the woman is not responsible for her own bank accounts and could not release this information.

After hanging up with the scammer, the woman called her sister, who takes care of all household finances, and together they readied a bank check for $4,000. She then called both the local police department and state police to locate her nephew. The police couldn’t find him in the system and said that if he had been arrested, it was possible that the information wouldn’t be available the same day. The officer then advised the woman to speak with her nephew’s parents about the situation since they were going to find out about it anyway. Once the parents were filled in on the phone call, they reached out to their son and found out that he wasn’t arrested and knew nothing about the incident. At that moment, they knew the phone call was a scam. A couple weeks later the same person tried calling back with the same story, but this time the woman knew better and hung up.

If you or someone you know receives a call similar to this one, hang up immediately and report it to law enforcement. Typically, this type of scam targets the elderly population, but fraudsters will also target those who might be sick or in frail condition. They usually call later at night or early in the morning when a person is more likely to be tired and not ask a lot of questions. In most cases, the scammer won’t actually know any specific details about your family, but in other cases they might due to the ease of finding information on social networking sites. Although the fraudster might pose as an attorney or law enforcement official representing the relative, or the background story might change such as asking for money for lawyer’s fees or hospital bills, they will always request that the money be sent immediately.

You can prevent yourself from falling victim to the grandparent scam by following these helpful tips: check to make sure the person you’re talking to is really who they say they are by asking questions only that person would know the answers to; hang up and contact the person who they claim to be directly, or reach out to a friend or relative of the person; regardless of how urgent the request may sound, never send money unless you are certain that it’s the real person. Additionally, be cautious of any “relative” requesting money via a wire transfer.

The IRS Scam

Another McGrath employee, who is new to the country, also almost became a victim of fraud. She received a phone call from a scammer claiming to work for the Internal Revenue Service (IRS). The scammer said that she owed money to the IRS and if the full amount wasn’t paid immediately she would be put in jail. The employee, who thought that she had already completed her taxes correctly, said she would pay the amount he claimed she owed but couldn’t do so all at once. The scammer then said he was going to call the police department since she was refusing to pay in full. After going back and forth with the scammer, he finally said he would send papers to her address on file. After the phone call ended, the employee spoke with her husband only to find out that it was a scam. The employee never received any papers.

It’s important to know that the IRS will never call to demand immediate payment without having previously mailed you a bill. If you or someone you know receives a call similar to this one, hang up immediately. The IRS states that it will never demand payment without you being able to question or appeal the amount that is owed. The IRS will never require the use of a single payment method, such as a prepaid debit card, or ask for credit or debit card numbers over the phone. The IRS also will never threaten to arrest, deport, or revoke your license if they are not paid the amount that is owed.

If you receive a phone call from someone claiming to be an IRS official, and you know that you owe taxes or think that you might, call the IRS at 1-800-829-1040. They can help you with a payment issue. If you know that you don’t owe any taxes, call the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 to report the incident. You can also file a complaint using the FTC Complaint Assistant, choose “Scams and Rip-Offs” and then “Imposter Scams.” Remember, the IRS does not use unsolicited email, text messages or social media to discuss personal tax issues.

It’s important to remember that we are all vulnerable to identity theft and fraud. Be sure to speak with your trusted independent agent for more helpful tips on safeguarding your personal information against identity theft or fraud.


Richard A. McGrath, CIC, LIA is President of the McGrath Insurance Agency, a division of Starkweather & Shepley Insurance, located in Sturbridge and Spencer, Mass. He can be reached at 508-347-6850 or at rmcgrath@mcgrathinsurance.com.

This article is written for informational purposes only and should not be construed as providing legal advice.