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HMRC issues warning over rebate fraud

Inland Revenue urges people to guard passwords

Inland Revenue warns of online scam

The Inland Revenue has warned criminal gangs are stealing taxpayers’ passwords in order to make claims for tax refunds to be paid to them.

HMRC says it’s discovered a series of attempted fraudulent claims being made through the self-assessment repayments system.

A spokesperson said this is was a new method of trying to extract money and he urged people to ensure passwords sent to them by HMRC are kept secure.

For advice on how to stay safe online including how to make sure you’re protected from hackers, see the Which? guide to protecting your details online.

How the fraud works

When people apply to use the system they are sent a password through the mail which is then used when the taxpayer logs onto the HMRC website over the following 30 days.

But criminals have been getting hold of mailed passwords as well as other personal details. It’s unclear how this has happened, though it’s likely post could have been stolen, people may have been tricked out of the details or letters containing the passwords may have been found discarded in bins. Fraudsters then use these details to make fraudulent repayment claims, requesting funds be sent to other bank accounts.

The HMRC spokesman said this fraud is different from so-called phishing e-mails which pretend to be from the tax authority and are aimed at discovering taxpayers’ banking details so their accounts can be raided.

Which? advice

There are steps people can take to reduce the chances of becoming a victim of this sort of fraud. For example, Which? advises people never to throw out official letters containing personal information such as passwords but to shred them first.

More than 9.5 million taxpayers are in the self-assessment system, which was changed this year to encourage more people to submit their details via the internet and two-thirds of all filings for 2007-08 were submitted via the internet, rather than on paper.

Liability for any losses will be judged on a case-by-case basis, the Inland Revenue spokesman added. The service has also posted advice on how to stay secure on its website.

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