Agency Scam Letters: An Ever-Present and Growing Threat

You get a letter.  It says “United States Government” on the envelope.  Your heart starts to beat faster.  Nobody wants to be in trouble with the Feds. 

The letter says it is time to renew or register a business license or trademark.  It says you are in “violation” and threatens you with “penalties and possibly imprisonment”.  It may say that you are due a refund or eligible for a government grant.  The letter directs you to a website that asks for your driver’s license, your social security number, or your EIN.  At the end of the process, there is a screen to input your payment info to cover the “processing fees”. 

You rush to comply. 

You just got scammed.

The scammers now have everything they need to wipe out your accounts.

Scammers can pose as government workers, calling to elicit valuable information.  But they work via letter, too.  Fake government letters look legitimate.  They have official looking seals and official looking names.  Sometimes they use the name of an actual agency.  The verbiage may be well-written.  It may be mildly threatening or friendly.  Its goal is to get you to take the next step, to log on to the website or call an operative, and ultimately, to give up the valuable personally identifying information that the scammers need to perpetrate their crimes.

If you get a letter that looks like it’s from the government and demands money or information, stop. Before you do anything:

Go to USA.gov to verify the names and contact information of federal, state and local  government agencies. Don’t use any websites or phone numbers listed in the letter.

Call the agency directly to verify the letter.

Know that the government will never ask you to wire money services like Western Union or MoneyGram, or pay with gift cards, cryptocurrency, or a payment app.   Only scammers will, because it’s hard to track that money, and hard to get it back.

Train employees not to send passwords or sensitive information by email or to enter this information into unauthorized websites, even if the request seems to come from a manager. Explain to your staff how scams happen and encourage them to talk with their supervisor in person if they suspect a scam.

Consult with an ACFE Certified Fraud Examiner to learn important ways to detect, deter and prevent fraud in your business.

When scammers go after your business or non-profit organization, it can hurt not only your bottom line, but your reputation as well.  If you spot a scam like this, report it to the FTC at ReportFraud.ftc.gov, your local law enforcement, and local media outlets.

Kate LeGrand, CFE is a Certified Fraud Examiner and the owner of Alliance ProAdvisors, an Indianapolis area firm offering Outsourced CFO Services, Small Business Accounting and Payroll, Fraud Prevention and Detection, & Certified Asset/Property Documentation.