Americans are ignoring basic tax season precautions and bestpractices that could prevent stolen identities and personal information hacks, according to a new survey from theScottsdale, Ariz.-based security firm IDT911.

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IDT911's fraud center saw a 154% increase in tax-related fraud cases from 2014 to 2015, and there are nosigns of this type of fraud slowing down in 2016. The TreasuryInspector General for Tax Administration said it expects tax refundfraud losses to reach an estimated $21 billion by 2016. Inaddition, the Federal Trade Commission recently announced itreceived a 47% increase in identity theft complaints in 2015, withtax refund fraud being the biggest contributor by far. Thesenumbers will surely continue to rise if the proper precautions arenot taken, the report said.

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Despite this and news of data breaches involving the IRS andrelated service providers, most Americans said they are not worriedabout the theft of their identities. To make matters worse, a highnumber of U.S. consumers are ignoring simple precautions and bestpractices, ID911 warned.

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For example, 63% of respondents in a Google Consumer Survey ofmore than 1,500 adult consumers said they are taking an “it couldnever happen to me” approach. Nearly one in five respondents saidthey did not even password-protect their Wi-Fi networks when theyfiled online from home.

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This risky behavior goes beyond the digital world, as 49% of allAmericans do not even lock their mailboxes when expecting theirrefunds through the mail, leaving a cache of sensitive personalinformation out in the open for anyone to steal.

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Adding to potential tax season turbulence, 38% of Americans saidthey are unsure of how to substantiate a tax preparer'scredibility. Meanwhile, only 12% planned on filing in Januarydespite the fact that experts commonly advised consumers to file asearly as possible in order to beat potential identity thieves tothe punch.

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Americans' lax approach to protecting personal information,combined with the increasingly sophisticated tactics carried out byidentity thieves, has resulted in a sharp increase in related fraudincidents in recent years.

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According to the report, it also appeared that many Americansmay not know where to go when they are eventually impacted. Morethan one third (38%) said they are not sure if their financialservices or insurance providers offer identity theft or fraudprotection services. The majority of respondents (57%) said theirfinancial institution would be the first entity they would contactonce they learned they were a victim of a data breach.

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“Tax season has become fraud season,” Adam Levin, chairman andfounder of IDT911 and author of Swiped, said. “As breacheshave become the third certainty in life, cybercriminals are able toglean information from literally hundreds of millions ofcompromised records in order to target consumers in tax relatedidentity theft and phishing schemes. In today's dangerous digitalworld, each of us must be vigilant and remain on high alert.Consumers need to combat fraud by following the 3Ms: Minimizetheir risk of exposure, monitor their bank and credit card accountson a daily basis and know how – or where – to find professionalswho can help them effectively manage the damage, by usingresolution resources provided by financial services institutions,insurance providers and the HR departments of their employers.”

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Additional key findings in the report included thefollowing:

  • More than half of respondents (52%) said they do not trust, orare not sure if they trust, online tax services. This is likely dueto the recent data breaches of multiple providers.
  • Millennials (aged 18-34) were overwhelmingly unsure of how tovet the credibility of a tax preparer (92%).
  • Despite the uptick in tax-related identity-theft incidents,most Americans (48%) believe the holiday shopping season is themost risky time of year. Tax filing season came in second at30%.

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