Help your consumers get out in front of fraud this tax season
As Benjamin Franklin famously said, “nothing in this world can be certain except death and taxes.” Unfortunately, as recent events have made clear, fraud would be an appropriate addition to that saying. In 2017, the Inspector General for Tax Administration, the watchdog for the IRS and tax system, identified 30,674 fraudulent tax returns collectively claiming a total of $961M in fraudulent refunds1.
While Tax Day usually falls on April 15, consumers have until April 17 to sneak their filings in at the last minute (since the 15th is a Sunday and the following day is a Washington D.C. holiday)2.
So, what can you do to help get your consumers ready?
Are consumers who they say they are?
With the recent wave of large-scale breaches releasing countless PII records, correctly authenticating users will continue to be an issue. More often than not, fraudsters are piecing together various PII to create an identity. Ensuring your authentication systems balance robust user verification with seamless user experience will be crucial. Taking a multi-layered approach to authentication with minimal end-user friction can create a win-win situation for you and your consumers.
Outside of authentication, companies can also help consumers themselves get out in front of fraud. For example, help consumers think through the benefits of filing earlier. By getting out in front of April 17, they can get their refund sooner, address any underpayment (if needed) and help prevent tax fraud. The IRS flags duplicate filings, so a consumer who gets theirs in “first” may be able to alleviate any confusion and fraud before it occurs.
Phishing schemes during tax time will continue to be a threat. For example, one city was a victim of potential tax fraud when employee data was compromised as the city issued W-2 forms. If you fear your company may be at risk, make sure to enact your breach protocols and notify consumers and the authorities using the proper channels.
Let's talk about credit
Use tax time as an opportunity to talk about credit literacy. Consumers know their score is important, but they may not always be paying close attention to it. What better time to talk about credit literacy than during tax time, when consumers are already taking a hard look into their finances.
Consumers are hungry for information that can help them understand their credit and what affects their score. Using data from TransUnion’s own Credit Education centers, we found the most-read articles across all credit scores didn’t change much, month to month. They focused on “tips for raising a credit score,” the “credit score recipe,” and “credit myths and misconceptions.”3
Get a head start on fraud prevention
In 2016, 15% of reported fraud victims found out about it on their credit report, and 13% only found out after they had been contacted by a debit collector4. By offering consumers different alerts on credit data (like their credit report) and non-credit data (like their social security number), companies can help consumers identify fraud faster and potentially help reduce its impact.
Fraud is on the rise and can be top-of-mind during tax season. Now is the time to create and foster a true partnership with your consumers in the fight against fraud with next-level prevention and identity protection.
1. Interim Results of the 2017 Filing Season, Treasury Inspector General for Tax Administration, March 31, 2017
3. CreditViewTM Dashboard page view analysis, October-December 2017
4. Javelin 2017, “Identity Fraud: Securing the Connected Life”