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Fraud & Identity Theft

The Top 3 Most Successful Identity Theft Scams of All Time

Identity theft isn't new. One of the most successful identity theft scams actually happened in the 16th century, when a man named Arnaud du Tilh took over the identity of a French peasant named Martin Guerre and lived with Guerre's family for three years before being discovered. (In a mysterious twist, Guerre returned during the trial!)

Identity Theft Scams Throughout History

The scam has been the subject of movies, plays, and operetta, such as The Return of Martin Guerre. While most fraudsters aren't like Arnaud du Tilh taking your place at the dinner table, they do want to take your place on tax returns and bank accounts. In the end, any scam that tricks you into handing over your sensitive information is a success story to the fraudster and a horror story to you.

Today's fraudsters may not physically move into your house, but they are tricking others into believing they're you in order to sign up for credit cards in your name or apply for a mortgage. How fraudsters scam you is always changing but there are two other schemes that are so clever they rank among the most successful in modern history.

IRS Scams

IRS scams are successful for several reasons. First, being contacted by the IRS strikes fear into almost every taxpayer; if you think the IRS is calling, you're going to pay attention. Second, every adult in the U.S. interacts with the IRS, whether they pay taxes or not, so this is a scam that could affect anyone. Third, even though the IRS repeatedly tells consumers they don't make outgoing phone calls and use snail mail to send any notices, these IRS scams still trick people into giving up personal information.

According to the Better Business Bureau 2017 Annual Scam Tracker Report, the IRS is the top legitimate organization used in scams, with 2103 scams mentioning it in 2017 alone. Since 2013, more than $63 million has been stolen from approximately 13,000 taxpayers, according to the IRS. This makes the IRS scam one of the most successful identity theft scams.

The scams themselves are constantly shifting. Fraudsters use threatening phone calls, send email messages directly to you, target your employer by requesting your W2 forms, and now have advanced to text messages demanding payment. A recent scam involves stealing your tax refund, depositing it directly into your bank account, and then contacting you to say the refund was a mistake and it must be repaid.

419 Scams in Your Email Inbox

A Nigerian prince has emailed you to share in millions of dollars if you help him transfer that money out of the country. Most often, you are asked to email all of your bank account information, so the millions can be directly deposited into your account. Of course, what happens is the fraudster wipes out your bank account.

Known as a 419 scam because it violates section 419 of the Nigerian criminal code, this tactic has its origins in Nigeria in the 1920s and has seen global outreach. The original scammer, P. Crentsil, sent letters offering his "magical powers" for a fee. He was arrested and charged under several Nigerian criminal codes, including 419. The Nigerian prince scam was especially popular in the earliest days of mass email use before users understood the dangers lurking.

It worked so well because recipients saw it as an easy way to help someone in need and receive a large monetary reward in return. It's a scam that preys on the goodness of people. As recipients become wiser to the scam, the fraudsters become more adept at making their con look like a legitimate request.

Today, the Nigerian prince is more of a punchline, but the scam is not. Fraudsters continue to use 419 scams to request sensitive personal information in return for a large monetary reward. One before being busted in 2017. Another stole $11 million from the IRS.

Learn more about the top scams of 2018 and what scam tricked the most Americans last year.


Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
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