Stimulus Update: Beware of These Child Tax Credit Scams

Learning how to recognize a scam is the best way to protect yourself against one.

If you're a parent, you may see the expanded Child Tax Credit as a financial lifeline, a way to make things easier for your family. Scammers see it as a payday, a way to part good people from their money. The truth is, scammers have no conscience and are willing to take money away from your children as long as it hits their pocket. Here are three of the more common scams and how you can avoid being suckered in.

Contact from the IRS

The Internal Revenue Service (IRS) warns Child Tax Credit recipients to be on the lookout for anyone who contacts you saying they're with the IRS. The scam works like this: You receive an email, phone call, or a message on social media, saying that there's been a "problem" with your Child Tax Credit and asking you to help by providing personal information. You may be asked to verify simple things, like your name and address. But what the scammers really want is information that will lead them to your money. They will ask you to verify the details of your bank account and Social Security number. They may also look for a way to weasel your debit card number from you. Once they have the information they seek, scammers not only have a chance to get into your bank account, but they have everything they need to steal your identity.

A slightly different scam

Another variation of this scam directs you to a fake government website, where you will be prompted to provide personal information. The websites can be disturbingly official-looking. The goal is to make you believe you're providing the government with the information they need to continue depositing Child Tax Credits into your bank account.

What makes the redirected website scam particularly easy to pull off is that the IRS does provide help through their website, and that site has been widely touted throughout the expanded Child Tax Credit rollout. Suggesting that a parent visit a particular website does not feel foreign and may not ring alarm bells.

One more nasty scam

Another way scammers believe they can reach funds meant for your family is to offer to help you fill out the forms you need to receive the money. If you're already receiving monthly payments, they may imply that those payments will stop unless you do "one more thing." These crooks sometimes ask for a "small payment" for their services which you're instructed to send via wire transfer, cryptocurrency, or gift card. In other words, they don't want a paper trail that leads law enforcement to them once you realize you've been scammed.

The truth is, you probably don't need anyone else's help. And if you do require assistance, IRS employees are professionally trained to provide help. You can contact an IRS helpline toll free at (800) 829-1040.

It's a numbers game

The current round of scams serves as a reminder to never provide another person with your child's personal information, particularly their Social Security number. One of the easiest things for a thief to steal is your child's identity using their Social Security number. And as soon as they have a fresh Social Security number, they can open credit accounts using their "new name." What's worse, a crook could run the scam for years, and your child would never know until they're an adult and it's time to establish credit in their name.

Scammers know that most people won't fall for their tricks. What they're counting on is a few good people who don't realize they're being played until it's too late. It's a numbers game. They may send out thousands of letters, text messages, and emails, hoping a handful of people will fall for it.

Outsmarting the scammers

In order to protect yourself and your children, remember the following:

• The IRS will never contact you via email, text message, telephone, or through a social media site.
• The IRS will never leave you a pre-recorded message. If someone calls claiming to be the IRS, you can be sure the call is not legitimate.
• The IRS will never contact you to ask for personal information or to verify financial information.

It's a sad truth that scammers are on the lookout for ways to steal from you. The good news is, you are fully armed to protect yourself simply by being able to spot a scam before it can do you any harm.