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White-collar crime in the United States is a thriving industry – and it's getting more sophisticated. The biggest scams threatening your money today don't just target the "suckers" of the world anymore.
The total cost of worldwide white-collar crime rose from just $5 billion in 1970 to $20 billion in 1980, $100 billion in 1990, and $220 billion in 2000, according to NW3C surveys and research of global law enforcement and regulatory reports. And a recent study from Eastern Michigan University estimates that white-collar crime will cost the United States as much as $1 trillion this year.
The absolute best way to avoid risk to your wallet is simply to be informed – by quickly picking up on the warning signs that your money is under attack, you can take immediate action.
That's why we've compiled a list of the three biggest scams targeting your money in 2014 – get to know these criminals before they get to know you.
No. 1 Money Scam of 2014: Tax Return Fraud
In 2013, the Internal Revenue Service (IRS) paid out $5.2 billion to identity thieves, according to a study released this week by the Government Accountability Office (GAO).
That the agency estimates it stopped another $24.2 billion in attempted fraud last year only highlights the fact that this scam is flourishing. Tax- and wage-related identity theft made up 16% of all ID-theft complaints at the Federal Trade Commission (FTC) in 2010. That portion rose to 43% by 2013, according to Time.
Florida has the highest rate of ID theft, so it's no surprise that tax return fraud is the most rampant there:
Here's how this scam works…
A perpetrator steals your identification. All he or she needs is a social security number, a laptop, and an internet connection. Then the criminal files a fake return before you file your taxes. The IRS issues its refunds within three weeks, so the thief collects the money quickly and then disappears.
The best way you can combat tax return fraud is to file your tax return early, and to do so electronically. Once the IRS gets a return with your social security number, it will notify you of any duplicate filings.