Beware of W-2 Scam

Non-profit organizations and school districts are now at risk of getting scammed, according to the Better Business Bureau of Minnesota and North Dakota (BBB).

The Internal Revenue Service (IRS) says the “W-2” scam is carried out by criminals who disguise an email to make it look like it came from a top executive or business colleague. The IRS says the phony email is sent to the company or organization’s accounting or human resources department, typically asking for a list of all of the company’s W-2 tax forms, employees’ dates of birth and Social Security numbers. 

“Criminals are now focusing on consumers’ personal information because it has a potentially much larger payout than run-of-the-mill credit card fraud,” said Susan Adams Loyd, President and CEO of Better Business Bureau of Minnesota and North Dakota.

This scheme was made aware in 2016 and the individuals behind it want to use personal information to file fraudulent tax returns. The cybercriminal then sends an additional email, asking that a wire transfer be made to a specific account outside of the company.

Newer targets of the W-2 scam include, school districts, healthcare providers, chain restaurants, temporary staffing agencies, tribal casinos and delivery companies. This scheme has already successfully targeted a Twin Cities school district in recent days.

The fake emails may say, “Can you send me the updated list of employees with full details (Name, Social Security Number, date of birth, home address and salary),” or “Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.”

These are a few steps to follow to prevent being a victim of this scam:

• Re-evaluate workplace procedures – The simplest way for criminals to run these operations is if a business lacks the checks and balances necessary to protect employees’ and clients’ information and requests for money transfers by untraceable means.
•   Meet with all employees – In the past, this type of activity was not something companies or non-profits gave much thought to.  Make sure all employees understand how these schemes work.
• Review written policies – Implement organizational policies to prevent the W-2 and similar office scams from succeeding. This will not only help existing employees, but others who join your organization so that they too will be on their guard.