U.S. tax payers are more vulnerable to identity theft than ever before, according to a new report.
Fifty-eight percent of Americans say they are unconcerned about tax fraud, according to data security and identity theft protection firm CyberScout. And this despite federal reports of 787,000 confirmed identity theft returns amounting to $4 billion-plus in potential fraud last year.
“We’ve reached an extreme level of cybercrime where identity theft has become the third certainty in life,” CyberScout founder and chairman said Adam Levin said in a press release. “In tax season, it is crucial that everyone remain vigilant and on high alert to avoid tax related identity theft or phishing schemes.”
In its second annual Tax Season Risk Report, CyberScout discovered that just 35 percent of U.S. taxpayers ask their preparers to use two-factor authentication to protect their personal information. Other worrying stats include:
- Only 18 percent use an encrypted USB drive to secure important documents such as tax worksheets, W-2’s, 1099’s or 1040’s.
- 38 percent store tax documents on their computer’s hard drive or in the cloud.
- Fifty-seven percent of consumers will file in March, April or later, which gives tax fraudsters more time to impersonate them online and steal their refunds.
- Fifty-one percent of taxpayers expecting a refund check do not taken precautions such as using a locked mailbox.
- Half of all taxpayers chose their tax service online or didn’t screen them beforehand.
“In order to reduce the risk of becoming a tax identity theft victim, consumers need to follow the 3Ms: Minimize their risk of exposure, Monitor your accounts and your personal identity, and know how to Manage the damage,” Levin said. “If the worst happens, victims of identity theft should turn to organizations they trust, including their insurance provider, financial services institution, or the HR department of their employer, who offer low-cost or free cyber protection services to protect and restore stolen identities.”
CyberScout is offering the following tips to taxpayers:
- Use long and strong passwords.
- Never give information to anyone online or by phone; the IRS does not contact people by those methods.
- Sign-up for direct deposit of refunds or get a locking mailbox for mailed refunds.
- Monitor and protect accounts and elements of all personal identity online and in social media. It’s easy for hackers to figure out answers to security questions from social media.
Taxpayers and tax preparers alike learn more about current scams and cyber-attacks on the federal website.
Jennifer Cowan is the Managing Editor for SiteProNews.
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