Dozens of arrests have been made in the phone scams plaguing American taxpayers. Acting on a tip, 70 call center workers were arrested for their alleged roles in tax-related scams following a police raid on call centers outside of Mumbai, India. More than 750 call center workers were detained in what a police spokesperson characterized as an ongoing investigation.
For years now, scammers posing as Internal Revenue Service (IRS) agents and officers have been making calls to taxpayers, demanding immediate payment and threatening jail or deportation for those who failed to comply. The scam has netted the millions and emboldened scammers to try new tactics, including making “robo-calls”, or automated calls leaving threatening messages.
Exasperated taxpayers have repeatedly demanded that IRS and law enforcement agencies take action against the scammers. Enforcement has been difficult because many of the calls are thought to have originated outside of the U.S. Calls were generally made using Voice Over Internet Protocol (VOIP) technology since it’s a cheap and easy way to mask the origin of the calls and “trick” your Caller ID to show up as the IRS or other government agency. Scammers then demand immediate payment over the phone by hard to trace methods like cash, wire or services like MoneyGram and Walmart-2-Walmart. In one variation of the scam, scammers demand payment using iTunes gift cards. iTunes gift cards can be used to make purchases on the App Store, iTunes Store, iBooks Store, Mac App Store or to buy Apple Music memberships. Requests for “tax payments” made using the cards – though it sounds outlandish – were successful: according to the United States Treasury Inspector General for Tax Administration (TIGTA), at least 328 people paid out a total of $1.4 million to the scammers using iTunes gift cards as of midyear.
It wasn’t until this year, however, that real progress was made.
In May of 2016, TIGTA announced the arrests of five individuals said to be involved in the scams. The five individuals were arrested in Miami, FL, and charged with wire fraud and conspiracy to commit wire fraud. According to the court documents, the five suspects are responsible for almost $2 million in schemes that defrauded more than 1,500 victims.
In August of 2016, Federal Communications Commission (FCC) Chairman Tom Wheeler hosted the first meeting of a “Robocall Strike Force,” an industry-led group committed to developing comprehensive solutions to prevent, detect, and filter unwanted robocalls. Chairman Wheeler called on major companies, including AT&T, Microsoft, and Comcast, to take specific action on robocalls and telemarketing calls, which are the number one source of consumer complaints received by the FCC, garnering about 200,000 complaints per year. Among the action items he mentioned are industry-wide Caller ID verification standards which would allow consumers to block calls from spoofed phone numbers as well as a “Do Not Originate” list that would make it more difficult for scammers to pretend to call from government agencies like the IRS. Currently, the FCC does not require robocall blocking or filtering but, as Commissioner Clyburn indicated, last summer, the FCC adopted a proposal that gave providers the green light to implement robocall-blocking technologies and urged them to provide consumers with free call-blocking services.
In the most recent arrests in India, Indian police indicated that they had not worked with US authorities but had requested their cooperation. A TIGTA spokesperson had no comment on the most recent arrests. An IRS spokesperson also had no comment.
Reports from those involved in the latest arrests indicate that, with this particular network, the bogus calls had been made from as many as seven call centers outside of Mumbai for more than a year, netting around 10m rupees per day ($149,835.20 US), or nearly 700 times the average monthly wage for Indian workers. According to the 2014 United Nations’ International Labour Organization (ILO) wage report, the average monthly wage in India hovers around $215 (downloads as pdf).
Because of the availability of cheap labor, India is a major center for outsourced manpower. Last year, however, it was overtaken by the Philippines as the top call center market: more than 1 million Filipinos work in call centers and related businesses, largely serving American companies.
For information on how to avoid becoming a victim, or how to report a scam call, check out this prior article.
