How to Avoid CARES Act Financial Relief Scammers
While economic impact payments can provide welcome relief from COVID-19-related income shortfalls, they also invite unsavory characters to try to deceive recipients out of their payment. Follow these tips below to avoid scammers.
As part of the CARES Act, Congress provided financial relief for many taxpayers with the introduction of a 2020 tax credit to be advanced to eligible taxpayers as “economic impact payments.” These are rebates, which are expected to be issued via direct deposit or checks from the IRS over the next several weeks and months.
Scammers have already jumped on the opportunity to use economic impact payments as a cover to steal money and personal information for financial gain. Below is a high-level review of economic impact payments and steps on how you and your clients can avoid related scams.
Economic Impact Payments
Taxpayers are eligible to receive up to $1,200 ($2,400 for married filing joint) plus an additional $500 per qualifying child under the age of 17. Taxpayers with adjusted gross income (AGI) of $75,000 or less for single filers or married filing separately; $150,000 for married filing joint; or $112,500 for head of household filers will receive the full rebate. The rebate phases out completely for taxpayers with AGI above $99,000 for single filers or married filing separately; $198,000 for those married filing joint; and at 136,500 head of household filers. For most Americans, the last filed tax return (2018 or 2019) will be used to determine the recovery rebate amount.
Beware of Scam Artists
The FBI has issued public service announcements warning of scammers looking to use uncertainty and fear to take advantage of potential victims. It is important to be aware of these common scams:
- Text messages pretending to be from the U.S. Department of Health claiming you need to take a mandatory online COVID-19 test in order to receive a stimulus check
- Fake emails from the Centers for Disease Control and Prevention claiming to offer information on the virus
- Phishing emails claiming to be from the IRS or other government agencies informing you that you qualify for an immediate stimulus payment and to click on a link to receive payment
- Social media messages and posts claiming you can receive additional stimulus payments to help pay medical bills if you verify personal information
- Phone calls claiming you can pay a small processing fee to expedite stimulus payments by providing personal banking information
More scams are sure to come. Remember the following tips to help protect yourself and avoid scammers taking advantage of the COVID-19 situation:
- Do not provide any bank or personal information over the phone. Government agencies like the IRS will not call to verify personal information such as banking or payment details.
- If you receive calls from someone claiming to be from a government agency, hang up immediately. Do not engage with them under any circumstance.
- If you receive texts or emails from someone claiming to be from a government agency, delete it without opening it. Do not click links or download files in emails or text messages claiming to be official requests to verify information.
Rely only on trusted sources such as:
Please share this post with your clients, family and friends. These reminders are especially useful for parents and grandparents. Let’s pull together and help each other out during this difficult time.
Information provided by Independent Advisor Solutions by SEI, a strategic business unit of SEI Investments Company. The content is for educational purposes only and is not meant to provide investment advice or as a guarantee of any specific outcome. While SEI welcomes comments, SEI is not responsible for, and does not endorse, the opinions, advice, or recommendations posted by third parties. The opinions expressed in comments are the view(s) of the commenter(s), and do not represent the views of SEI or its affiliates. SEI reserves the right to remove any content posted by users of this site in its sole discretion.
Stay updated with our COVID-19 resources page.
This is an article published by Dean Mioli of SEI in the Knowledge Center.
Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.