The falsification of tax returns by defrauding consumers and the Internal Revenue Services is called tax fraud. As the April 18 deadline for filing tax returns in the US approaches, taxpayers are scrambling to file their returns and attackers are trying to defraud gullible citizens through various attack tactics. To up your game. Is your fraud defense strong enough to prevent attacks this tax season?
The week before the April 18 deadline for filing taxes in the US is a period of frantic activity for taxpayers – and bad actors, who take advantage of the stress associated with filing returns to make money at taxpayers’ expense.
Attackers target consumers and providers
The methodology for tax fraud is simple, with attackers relying heavily on social engineering. They make phone calls or send emails – seemingly originating from the tax department – to coerce consumers to ‘pay taxes’ or share personal and tax-related information on fake websites. These fake calls and phishing emails have evolved over time, making it difficult for an average consumer to identify them as fake or manipulative.
However, it is not just consumers that attackers target; Payroll offices, financial services and tax preparers are also on the hit list. The only difference is that attackers start targeting these services as early as January. Attackers use malware or pose as authorized superiors to access copies of employees’ W2 forms. Once they have the information, it becomes easy to commit identity theft and tax fraud.
Attacks made easier with online filing
During tax season, many unproven tax preparers suddenly emerge, which can pose a serious risk to taxpayers. These tax preparers could be bad actors in disguise, trying to steal consumers’ tax information or, worse, using their own account details instead of taxpayers’ to receive refunds.
With digital taking center stage in our lives, many taxpayers have opted for the online route as well as online filing of returns. Tech-savvy bad actors couldn’t have asked for a better deal as they could use the anonymity of the internet and the easy availability of commodity tools to impersonate legitimate consumers and divert tax refunds into their accounts. They will try to tap into the huge backlog of lakhs of returns from the previous year to avail various tax exemptions including income tax credit, child tax credit, recovery rebate credit and employment benefits.
attackers can try account acquisition Attacks to break into networks of tax preparers and online accounts of taxpayers to manipulate them for tax fraud. For example, upon successful acquisition of a consumer’s tax accounts, attackers can change their own bank account details to re-route funds. Similarly, attackers can plagiarize and stitch them together to create fake details. artificial identitywhich they can then use to make fraudulent new accounts, attacker deployed bot Crowds tend to create new accounts, allowing them to file multiple fake tax returns and at times receive illegitimate refunds.
Bad actors are also involved in VAT fraud, by setting up and registering non-existent companies for fake VAT refund claims. They closed these counterfeit shops immediately after getting the refunds to avoid getting caught. Over the years, attackers have increased the use of fake invoices to claim illegal ITC credits.
Ahead of Tax Day (April 15), fintechs and digitally enabled service providers that help consumers file their tax returns are most vulnerable targeted attack, Many service providers either lack adequate security or use outdated solutions that do not match the developed attack tactics that attackers use today. These service providers need robust solutions to be able to effectively protect entry points – logins and new account registrations – and protect the information of their consumers. Account Security,
Stay one step ahead of tax fraud with Arkose Labs
Arkose Labs is a trusted partner for many global financial service providers when it comes to long-term protection from developing tax fraud strategies. Arkose Labs continuously monitors oncoming traffic to prevent bad actors at the entrance. We do this by using real-time risk assessment of each user and challenging suspicious traffic with us Proprietary 3D Puzzles,
While legitimate users can easily overcome the challenges, bots and scripts fail immediately. Malicious human users are faced with far more puzzles that continue to grow in complexity. This increase in volume and complexity prevents them from taking on the challenges on a large scale. They require investing more time and resources, which reduces returns and does not make the attack worthwhile, Therefore, attackers are forced to abandon the attack and move on, while good users can continue to file their taxes without interruption.
To learn how Arkose Labs helps fintechs and other financial services providers to be effective fraud prevention Please take measures to fight tax fraud during this busy period book a demo just.
*** This is a Security Bloggers Network syndicated blog from Archos Labs written by Patrice Boffa. Read the original post here: https://www.arkoselabs.com/blog/heres-how-to-stop-attackers-from-exploiting-taxpayers/