With tax season upon us, it can be easy to get caught up in the financial aspect of filing taxes and completely lose sight of the security risks of doing so online. Using e-filing software has become the norm for most people since it offers convenience and simplicity. However, the growing popularity of online filing software has helped to usher in a new era of electronic tax fraud.
“You’re seeing the dawn of this new era,” said Jim Penrose, an executive vice president at cybersecurity firm DarkTrace. “A concerted effort on the part of cyber criminals to gather the personally identifiable information of taxpayers.”
As e-filing becomes more popular, so does fraud
Cybersecurity experts are warning users that e-tax fraud is increasing exponentially, and reports from state officials seem to back up this claim. Spikes in electronic filing fraud have been seen in 19 states and got so bad in Minnesota that the state stopped accepting some types of electronic returns. According to Adam Levin, chairman of identity security firm IDT911, thousands of American have gone to file their tax form online this year to find that someone else has already filed under their name. Not only does this put users’ personal information at risk, but resolving these types of issues can take nearly a year.
Part of the allure of stealing tax information filed online is how ubiquitous the practice has become, increasing the amount of data that can be stolen. Almost 90 percent of taxpayers filed their returns online last year, creating a quick and easy way for cybercriminals to file phony forms. This allows hackers to amass huge revenues with very little risk to themselves. The practice is becoming so popular, in fact, that major cities like Tampa, Florida are seeing decreases in street gang violence as criminals make the shift to committing cyberattacks instead.
“Anybody who knew about it, you’d be a fool to not try to get involved with making some money,” said Corey Williams, a former cybercriminal now serving time in prison for e-tax fraud. “I could wake up in the comfort of my own home, and just get on a laptop, do about 15 returns a day. Fifteen times $3,000 a return, that’s $45,000 a day.”
Tax fraud isn’t just an individual concern
While e-tax fraud might not seem like the kind of thing most enterprises would be concerned about, it turns out that cybercriminals are able to use the personal data exposed during breaches of major companies to make it easier to file phony tax returns. Phone numbers, names, Social Security Numbers, email addresses and more are commonly exposed when businesses are hacked, all of which can be used to fraudulently file a tax return. According to Levin, personal information of 80 million customers that was exposed during the recent data breach of health insurer Anthem ended up on the black market and was a gold mine for cybercriminals committing tax fraud.
If businesses with lax network defense strategies are hacked and the information exposed is then used to aid cybercriminals in committing tax fraud, consumers will likely lose a lot of trust in that company. In order to protect sensitive customer data from being stolen, enterprises should implement a layered security solution.
A defense strategy centered around layered endpoint security is one of the most reliable ways businesses can improve the protection of sensitive customer information. Utilizing multiple defense methods at once helps to ensure that the large amounts of client data stored in enterprise networks as such a strategy protects files at all possible entry points. Security Solutions like Faronics Anti-Virus offers traditional firewall protection, as well as Anti-Spyware, Anti-Rootkit, Anti-Virus and Web filtering. Don’t wait until it’s too late to protect customer information, implement a layered security solution now.