Robert Siciliano, a McAfee security expert, explains how fraudsters steal tax refunds using stolen Social Security numbers and children's identities. The IRS loses an estimated $4 billion annually to this scam. He recommends identity-theft protection, credit freezes, antivirus software, and VPNs to protect yourself.
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In the meantime, it's a frightening and growing trend. More people stealing personal information to get big tax refunds. A new study by Pew Research says an alarming 18% of Americans have had their personal information stolen, and that number is up from 11% just last July. So it's increasing quite quickly. That information taken includes Social Security numbers, credit card numbers, banking information. You know how it is. Joining us now is Robert Siciliano, an identity theft and McAfee online security expert. It's a good day to talk about this, uh, Bob. Because we're going to certainly get the video footage of people in line at the post office, but so many of us are filing our taxes online. I mean, how safe is that really? We're putting a lot of information out there.
So the act of filing taxes online in and of itself is not a problem. It's those that have access to your data and then file in your behalf fraudulently that is the problem.
And how many people can get that information? How easy is it to get access?
Yeah, the advice that I'm seeing recently regarding, you know, protecting your information is protect your Social Security number, which is impossible because the horse is out of the barn, the cat's out of the bag. We've been giving out our socials since we were kids to schools, to jobs we've been to, to colleges. And eventually, you know, law enforcement has it. It's in government files and records. It's everywhere. So how can you protect data that's all over the place? The reality of it is that the IRS, uh, the system is based on the honor system when you file taxes, and the honor system is broke.
And so how do we fix it?
Yeah, the IRS has, uh, software that detects anomalies, but with the amount of files or tax returns that are filed every year, both via paper and electronically, they're losing this battle to the tune of about $4 billion a year. Over the years, as we progress with a variety of technologies that identify the device from which is filing, along with properly identifying citizens with effective identification, that will begin to solve the problem. But we're at least 10 years away from that.
I was just going to say, it sounds like a massive undertaking, what you're talking about. A smart plan, but a massive undertaking. The criminals, though, are really bold, Robert. I mean, some of these guys— one of them, two of them are actually on trial for this— they were using Eric Holder. The Attorney General's name and Social Security number to try to get a tax refund. I mean, that's, that's crazy, right, to think about that they thought they could get away with it. But is it easier said than done? I mean, if you have some basic information, is it pretty easy to rip off the US government?
So all a bad guy needs to do is work for a company that has Socials on file and basic access to either accounting or HR information, and they can in turn use that documentation to file hundreds of tax returns under these people's information, get it done by the first week of February, way before, say, those victims file their own returns and get their returns in their behalf. And bad guys, it's so easy for them. They're doing it from overseas and getting the rebates sent to, you know, Europe and Asia and Ireland and other places.
You would think that it would raise some red flags, right? But apparently not. As you mentioned, $4 billion. I know you're a dad, Robert Siciliano. I mean, one of the things that we're also seeing seeing a huge rise in trend is that children's Social Security numbers are being taken, and then they're filing for taxes using your, your kid's name and number, and you don't even know it because your kid is probably not filing taxes unless they're old enough to. So, so, I mean, what's your advice to parents on that? What do you do? Can you check your, your child's records in any sort of way just to head off any identity theft?
You know, I, I hate to come off as being hopeless, but this is kind of a hopeless situation until they solve it, right? Until they make the necessary investments. One thing that you can and should do that doesn't necessarily protect you from tax identity theft is get identity theft protection. And what that does is it locks down your social on your credit, making your information less appealing to criminals. Along with that, you can also get what's called a credit freeze, which additionally locks down your data, preventing new account fraud. And then do the other things like important stuff like, um, antivirus, anti-spyware, anti-phishing, a firewall. Protect your wireless connection with the VPN, you know, making it difficult for a bad guy to use your data without your authorization.
I see. So it's sort of like when a bad guy walks past a car that has a car alarm and they think, you know what, I'm gonna hit the other one because this looks a little bit more challenging. Sounds like something we should all examine. Robert, great to see you as always. Thank you so much.
