How to protect your business against fraud this tax season

Like Uber uses technology to connect riders and drivers, scammers use it to create convincing cons. Don't be fooled by "too good to be true" sales promises, fake tax return offers, or deductible donation scams – these can all be traps designed to steal from you.

Recent statistics paint a worrying picture. According to government figures, in June 2023 alone, Australians lost a staggering $38 million to scams. The Australian Customer Owned Banking Association (CBA) warns that the end of the financial year (EOFY) makes an attractive disguise for scammers.

Here's how to fight back. We'll explore the five most common tax scams and how to identify them so you can protect your business and have a stress-free tax season.

Phishing for information

The scam

‍You receive an email or social media message (often with the ATO logo) urging you to click a link to update or verify your details. These links lead to fake myGov websites designed to steal your login credentials.

How to spot it

‍The ATO will never ask for personal information through email or social media links. They also don't have an Instagram account, so any contact there is a scam. Legitimate ATO social media profiles have a large following and have been active for years.

Protection panic

The scam

‍A scam email (possibly with a QR code) claims the ATO is upgrading security and needs you to update your myGov multi-factor authentication. This, again, leads to a fake website that steals your login information.‍

How to spot it

‍The ATO won't send QR codes for login purposes. Links in these emails are also red flags.

The refund mirage

The scam

‍Enticing SMS messages or emails, supposedly from tax officials, promise a quick tax refund but require you to enter bank details or pay a fee to process it.

How to spot it

‍The ATO may contact you about your tax return, but they'll never ask for personal information through these channels or request a fee for a refund.

Debt dread

The scam

‍Phone calls or SMS messages impersonate tax officers claiming you owe tax and must pay immediately to avoid arrest or TFN suspension.‍

How to spot it

‍The ATO won't threaten arrest, demand immediate payment over the phone, or ask for payment via gift cards, vouchers, cryptocurrency, or personal bank accounts.

Fees for free services

The scam

Social media ads offer (for a fee) services like obtaining a TFN, which the ATO provides for free. These ads lead to websites designed to steal your money or information.‍

How to spot it

‍Applying for a TFN is accessible on the ATO website. If you use a tax agent, ensure they're registered with the Tax Practitioners Board.

Additional expert tips to keep your business safe

• Always be suspicious of unsolicited communication. The ATO will never ask for personal information through email, social media, or phone calls. If you receive a message claiming to be from the ATO, don't click any links or give away any information.
• Double-check everything. If you need clarification on the legitimacy of communication, contact the ATO directly on 1800 008 540 to verify.
• Use secure channels for communication. When sending sensitive information to the ATO, use their official online portals or mail them directly.
• Keep your software up to date. Outdated software can have security vulnerabilities that scammers can exploit.
• Educate your staff. Train your employees on how to identify and avoid tax scams

We provided more ways that small businesses can take to protect themselves here on how to stay informed about scams here.

How to report a tax scam

• If you encounter a tax scam, report it to the ATO by emailing screenshots of social media posts and accounts or SMS messages to reportscams@ato.gov.au. You can also forward suspicious emails to the same address.
• If you've given money or personal information to a scammer, contact the ATO on 1800 008 540.
• Report these incidents to your financial institution, IDCare and ReportCyber.

By following these tips and staying vigilant, you can shield your business from tax scams this tax season. Remember, knowledge is power – the more you know about these scams, the better equipped you are to protect yourself and your business.

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