The HMRC Email that many thought was a scam, but it WASN’T

Organised crime has always had a deep and binding love affair with tax collectors around the world, but up until this year the affair was always one-sided. But all that seems to have changed now due to a move by HMRC that has opened up the field a lot in favour of both HMRC and the scammers.

We can’t say it was intentional, but certainly any action that confuses taxpayers will be to the benefit of HMRC.

When it is a case of informing you of an allowance or rebate you may be entitled to, then if you don’t understand the message, you may possibly not claim it, and then the government saves some money. When it is a compliance issue, this allows them to collect more revenue in the form of penalties, and to pursue prosecutions that will frighten the public into increased compliance – and it is that last point that has so endeared HMRC to the real criminals.

Criminals love tax because ordinary people live in fear of it

The fear element is a really powerful weapon for criminals to exploit. There are obviously always some people who try to avoid paying tax they legitimately owe. For those people, fear is not a deterrent. But far greater numbers of people find themselves on the wrong side of the balance sheet due to a perfectly innocent oversight, and it is those people who particularly dread receiving that letter, email, or phone call telling them that they haven’t fulfilled their tax obligations.

When there is also an allegation of fraud or deliberate tax avoidance, the fear can be greatly compounded. Criminal gangs are aware of this and have been exploiting it for years.

How the scam works

There are two versions of the scam. One of them preys on people’s fear of prosecution and penalty, while the other targets the desire to get some unexpected income.

Criminals in the first version of the scam dupe their victims by initiating a convincing communication (an email, for example) that provides sufficient detail and authority to trigger a fear response in the recipient which the perpetrator hopes will be strong enough to make the victim react first and think later.

Even if the victim is sceptical about the authenticity of the communication, the fear response can sometimes be so great that they will respond anyway “just in case”. As we have stressed before here at Hylton-Potts, some of these scams can be incredibly sophisticated. When the victim responds, the perpetrator will sometimes be able to give an impressive amount of personal information about the victim, which will help with the suspension of disbelief. The perpetrator then tricks the victim into giving more information about themselves and their finances.

In the second version of the scam, the perpetrator usually just sends out many thousands of generic emails that suggest the recipient is eligible to claim a substantial sum.

The first version is more successful in fooling an individual victim, but the second version involves a lot less work for the perpetrator. It relies on volume for its success, which is why it is more commonly seen.

Serious consequences

If you were to become a victim of this scam, the consequences could be very grave indeed. While you may initially be worried about losing a few hundred pounds, you could in fact end up losing everything you have, including your own identity. This is a serious problem that has already claimed thousands of victims, and the list of victims continues to grow.

Fighting back with awareness

Fortunately, thanks to the efforts of law enforcement agencies and other organisations, there is now much greater public awareness of these sorts of scams. As more people learn about the scams, it becomes more difficult for criminals to be successful in their deceptions.

How HMRC has undermined these efforts

Consult any resource on scam detection and you will find that one of the key “tells” of a scam is that the communication requests details that the originating entity would not be expected to need to ask.

For example, the company that provides your Internet service will not normally request that you tell them your password. Banks do not email their customers to test their security credentials and government agencies don’t normally email to ask you to provide credit card and mortgage details through online forms. Or at least they didn’t until April this year, when HMRC decided to change the rules of the game.

As Sam Dunn reported in an article for This is Money, HMRC sent out an email that looked exactly like one of the scams government agencies are always warning about, including HMRC itself. As you can see, HMRC was quoted in the Telegraph in February 2014 stating that HMRC never contacts taxpayers via email about their tax refunds. The article also says that legitimate forms from HMRC will never ask for your credit card details. Now less than a year later, HMRC is sending out emails and requesting credit card information, along with other sensitive information.

At least this time it wasn’t a compliance notice, so people who ignored the notice did not face the risk of penalties (other than missing out on possibly claiming an allowance to which they were entitled), but the fact remains that the line between real and fake has now been blurred. The primary distinguishing feature by which we could immediately identify if a message was likely to be a scam now can’t be entirely trusted.

The unannounced change of policy has left people bewildered and many thousands of people who could have legitimately claimed the marriage allowance almost certainly did not do so. This is potentially a windfall result for the government, which can now claim that it delivered on the promised marriage allowance while effectively not doing so in practice, simply because most people didn’t trust the notice they received.

Other ways to spot a scam

By now you may be quite worried by this absurd change in official policy, and rightly so. Unfortunately, apart from those formerly reliable clues, there are not many other indicators to the legitimacy of a communication you receive but some things you can look out for include:

• Errors in grammar and spelling
• Graphics that are not exactly right
• Hyperlinks that do not go where they suggest
• Communication that is not addressed to you personally

The presence or absence of any of these clues is not absolutely definitive because criminals are becoming more sophisticated in their methods.

What to do when you receive a communication claiming to be from HMRC

If you suspect that a communication you have received claiming to be from HMRC is not legitimate, you should not respond to it directly, but instead contact [email protected]

The government also provides an index of known fake communications at http://www.hmrc.gov.uk/security/index.htm but the problem with relying on this index is that it won’t list any new scams as they emerge, only those that are already known about.

What to do when you receive a communication you suspect to be legitimate from HMRC

If you suspect it to be legitimate communication which threatens any consequences for not responding, again you should not respond to it directly, but instead refer the matter to us here at Hylton-Potts by calling us on 020 7381 8111 or alternatively, by sending us an email [email protected] and we will respond on your behalf.

Doing this will ensure that your rights are protected and that you will get the best possible outcome each and every time.

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