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Scam of the Month: Child Tax Credit Payments in the Crosshairs

october 12, 2021 | fraud protection
Con artists have targeted the new Advance Payment Plan for Child Tax Credits

Watch Out for Crooks Trying To Steal New Child Tax Credit Funds From Your Bank or Mailbox

One trending scam last month should come as no surprise to trained scam trackers. Con artists have targeted the new Advance Payment Plan for Child Tax Credits (CTC) that the federal government started sending to qualified taxpayers in July 2021.

The funds are part of a new effort to raise children out of poverty. But, unfortunately, just like the coronavirus stimulus checks before them, these cash deposits can become a gold mine for scammers if you're not careful.

New Scam, Same Old Tactics

Hackers exploit consumers whenever money gets involved. In this case, it could be a fee to fill out claim forms or simply taxpayer impersonation.

"Cyber criminals use every opportunity to try to scam people out of money," the IRS warned recently. "Be alert to criminals who ask you, by phone, email, text—or even on social media, to verify your information so you can get advance Child Tax Credit payments."

Imposters want your personally identifiable information (PII) for fraudulent uses. For example, someone might offer to help you file a claim or offer to submit a form for you—for a fee. More scams.

The IRS won't email you or call to request data. Their agents don't use social media channels either. So, U.S. Mail remains the agency's primary form of first contact with a taxpayer.

"When it comes to phone calls, remember the IRS does not leave pre-recorded, urgent or threatening messages. For example, if you get a voice mail saying a warrant will be issued for your arrest… this is not the IRS," the agency states.

Eligibility for these funds is determined from 2019 or 2020 tax return details, and enrollment is automatic if you qualify. Be very wary of anyone who tells you otherwise.

Know the Schedule

Expect payments to arrive mid-month through December as the government distributes more aid to assist qualified dependents. When your 2020 tax return is processed—there is still a significant backlog due to coronavirus—your payments may be tweaked slightly to make sure you receive the correct funding.

To learn more about the advance child tax credit—including other eligibility factors and the right way to provide your information to the IRS—and to arm yourself with more scam protection tips, the IRS offers a unique scam website loaded with sound advice.

Payments Do or Don't

The IRS has faced challenges regarding the consistent distribution of payments due to that paperwork backlog and all the extra stimulus disbursements it was tasked to add to its workload. That's led to some hiccups. For example, while most initial payments arrived via direct deposit, many August ones did not.

"Some advance payments of the Child Tax Credit were sent by mail in August instead of direct deposit. Check your bank account in September for direct deposits of the payment," the agency advised.

The Right Way Works

Learn about how the government handles these payments. Most eligible recipients receive them automatically. There's no required application or request form. Anyone who calls offering to help you fill out documents is likely out to scam you.

Not required to file a tax return? The IRS has established a unique child tax credit portal to provide basic information needed to claim CTC if you're not required to file general income taxes. You can also offer banking details for direct deposit, which could thwart mail thieves.

Shield Yourself

The CTC helps children in low-income households thrive by making quality health care, school supplies and other financial help affordable. It's great news for thousands of families, but your kids still need you to protect them from crooks. Guard their PII, so scammers move on to other targets.

Child identity theft is one of the most successful and devastating forms of ID misuse. Stolen identities can obtain mortgages, boat loans, credit cards, student loans and much more.

Child ID theft often remains hidden for years. When your youngster turns 18 and wants to open up a bank account or rent an apartment, that is when much child ID theft becomes evident.

Remember, scammers never sleep. There's always someone out there waiting to separate you and your money. IDShield helps families reduce this risk by monitoring child data when kids are still minors. We offer our members consultations on credit freezes and other ways to reduce this severe crime risk for your entire family.

Try our service free for 30 days. We think you'll love the peace of mind that comes with the knowledge that someone's watching your data 24/7.

IDShield is a product of Pre-Paid Legal Services, Inc. d/b/a LegalShield (“LegalShield”). LegalShield provides access to identity theft protection and restoration services. IDShield plans are available at individual or family rates. For complete terms, coverage, and conditions, please see an identity theft plan. This is meant to provide general information and is not intended to provide legal or tax advice, render an opinion, or provide any specific recommendations.

Learn more about protecting yourself against IRS scams and fraud