Don't be duped; the IRS isn't calling you

Updated: Wednesday, July 13, 2016 @ 5:34 PM
Published: Wednesday, January 20, 2016 @ 2:16 AM
By: Elizabeth Hagedorn

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"The IRS is calling me," a man said in a promotional video for the Treasury Inspector General for Tax Administration. "Can this be for real?"

Nope. Tax season is here, and so are the con artists posing as IRS agents.

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It usually goes something like this: Victims are told they owe back taxes to the IRS and must pay up immediately through a debit card or wire transfer — or face arrest.

In 2014, the Federal Trade Commission received nearly 55,000 complaints about scammers like these — that's a 25-fold increase from complaints filed in 2013.

Thousands have fallen for it. Since October 2013, some 5,000 people have forked over $26.5 million because of these scams.

To avoid getting scammed, keep in mind some things the IRS says it will never do. It won't call to demand immediate payment, ask for credit or debit card numbers over the phone, or threaten you with the police.

The IRS will always first make contact by letter. 

9 places you should never use a debit card

Updated: Friday, July 15, 2016 @ 11:18 AM
Published: Friday, November 20, 2015 @ 6:23 PM
By: Clark Howard Staff


            9 places you should never use a debit card

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ClarkHoward.com

Debit cards are a popular alternative to credit cards, because they only allow you to spend what you have in your checking account. In fact, 31% of holiday shoppers plan to use debit to pay for their purchases this season, according to a new BankRate.com survey. But debit cards are full of hidden dangers for your wallet!

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Long called "piece of trash fake Visas and fake MasterCards" by Clark, debit cards are overwhelmingly inferior to credit cards for several reasons.

If your credit card is compromised, the harm to you is relatively small. You contact the issuer to report false charges and you may have to do some paperwork, but no money leaves your hands. With debit card fraud, however, there is money that leaves your hands. And you have to fight to get your own money back. Unfortunately, it's now taking longer and longer to get that money back.

Here's why you might want to kick that debit card out of your life

First, hotels, gas stations, and rental car companies will put a hold on your checking account if you use a debit card. If you have other checks floating around that someone tries to cash, that could throw you over into insufficient funds land and result in heavy fees. Plus, the company that runs your debit card may even do a hard inquiry on your credit without you knowing, which will lower your credit score!

Second, you have fewer consumer protections with debit cards. For example, let's say you notice fraudulent activity on your credit card. You have 60 days to report it and dispute the charge with your credit card company. But if you used a debit card, you have only 2 days to report it!

>>Read more: 9 money mantras to avoid overspending

9 places to never use a debit card

1. Pay at the pump

>>Read more: Dangers of using your debit card at the gas pump

2. When you're buying online

3. At the supermarket - A couple of years ago, Save Mart supermarkets were hit by criminal rings that put skimmers on the credit/debit card readers at self-check lanes in 20 Save Mart and Lucky branded locations throughout California. Very often, this particular kind of scam will be perpetrated by a crook dressed in the counterfeit uniform of the technology company that does regular routine maintenance on credit/debit card readers at a business!

4. At the car rental counter - The Dallas Morning News found that it's standard practice (and completely legal) in the industry for car rental companies to do a hard inquiry on your credit report, often without your knowledge or consent. They're trying to protect themselves against auto thieves that love to use debit cards as a low-risk method to get rentals that they can steal. But that inquiry can drastically lower your credit score in the process. The simple solution is to use a real credit card instead.

>>Read more: How to turn off the debit function of your debit card

5. When booking advanced travel - If you have concerns about the solvency of a company you're buying future travel from, you're better off using a credit card. This holds true particularly during an economic downturn when leisure travel businesses like cruises and some airlines can go bust. Paying with credit card ensures you can do a chargeback if you don't get the travel you paid for. While we're at it, have you considered trip insurance if you're taking a cruise, a tour, or traveling on a trip that requires pre-payment of thousands of dollars?

6. When buying furniture and major appliances - If you are ordering furniture or appliances and waiting on delivery, pay only by credit card. You reduce your risk if the store goes bust by doing that, which we saw a lot of during the housing slump when furniture and appliance retailers really took it on the chin. If you do not have your delivery within 50 days, put the credit card charge in dispute. You lose all right to any dispute after the 60th day.

7. When setting up automatic drafts - Auto drafts are a favorite way of utility companies, cable companies, health clubs, burglar alarm companies, and even mortgage lenders to get their money from you each month. But that business may continue to make monthly automated clearing house (ACH) debits from your account once your contract with them ends. That is illegal and you can get it to stop by citing what's called "Regulation E" and using Clark's sample letter to stop automatic payments.

8. Independent ATMs - You run the risk of skimmers. While skimmers can be found on bank ATMs, they're less likely because there are often security cameras in place.

9. At a restaurant - Because there is such high turnover at restaurants, you don't want a dishonest employee to get hold of your digits.

The only safe way to handle a debit card is...

If you wish to continue using a debit card in the future, be sure you tie it into a separate account that's only used for debit transactions so only that money is at risk. You want your account that has the money you pay your mortgage, your car payment, your student loans, etc. cordoned off so it can't be compromised.

Clark Howard
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