Internet Fraud in Action

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We had an unusual occurrence with one of our clients in the last 6 months where someone had somehow accessed some of their private details and was able to make some changes to their details with the Australian Taxation Office (ATO) and the My Gov online system. This then leads the fraudster to get access to tax refunds that the client was expecting and even lodge fictitious tax returns that would give rise to dodgy refunds.

This is the first time we have heard of something like this with any of our clients, so it is an excellent lesson to be vigilant with private information. Individuals must seek assistance from reliable and trustworthy accountants in Sydney, as some profit from this fraud.

This is how we believe it happened. The fraudster somehow accessed some personal information about our client. It was able to set up a fake MyGov online account (an account that the ATO does not run but some of the contact details and bank account information can be integrated into the ATO records, especially for the part of the tax return that advises the bank account that the refund is to be banked into).

This access to the myGov account (albeit a fake one) allowed them to, in the first place, lodge a fake tax return via e-tax (a form of lodgement that we, as tax agents, have no control over) with the refund going to their designated bank account and the Notice of Assessment sent to a PO Box. After the dust settled on this fraud and we advised the ATO and myGov of the fake tax return, we were assured that it could not be done again. Not so!

We then lodged the actual tax return with the correct bank account details. The fraudster, who still had access to the myGov account, changed the bank account details to their own again after the return was lodged, changed the address to a new PO Box so that the Notice of Assessment could be received, and the refund disappeared into their account. The ATO and myGov had a major embarrassment in explaining how the same fraud had been committed twice.

We rectified the situation after a delay of a few weeks (and a few letters and phone calls to the ATO complaints section), and the client received their refund. The Government, however, would have been out of pocket to around $5,000.

Our office cannot monitor fraudulent tax returns being lodged; by this point, it is too late. We noticed that this fraudulent tax return was lodged when we began to prepare the real tax return. A fraudulent tax return could be lodged in July, with the fraudster receiving the refund. However, if your work is not scheduled until months later, we may potentially not know about the fraud until as late as May the following year when we receive your information and start your tax return.

The myGov account is a link between you and the government. It links to all Government agencies and does not require much information to set up, so fake accounts can be created with relative ease. As a suggestion, we recommend our clients set up their own myGov account, which will help prevent fictitious accounts from being created in your name.

The moral of the story is not to let anyone know any of your personal information. They may try to access it any way they can, whether by stealing mail or extracting information from you over the phone. Government agencies don’t work like this, so do not give any information to anyone over the phone or to anyone unless you are sure of their relevance. The above example, which we have never seen before in over 40 years of practise, shows that they are trying to gain access to your cash.

Should you have any questions, please do not hesitate to contact us.

*Correct as of February 2015

Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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