Spotting Refund Scams: How to Verify Return Offers

Why refund scams work—and who scammers target

Refund scams rely on urgency and trust. Scammers impersonate banks, utilities, internet providers, or the IRS and promise a refund or credit to prompt quick action. Common targets include older adults, people under financial stress, and anyone unfamiliar with digital-safety practices.

In my practice advising clients on tax- and identity-related issues, I’ve seen refund-scam attempts take several forms: phishing emails claiming a tax refund, simulated overpayments from a buyer asking for a “return” of funds, or fake utility credits that ask for verification of account credentials. The scam’s goal is always the same: collect data (Social Security numbers, bank routing numbers, login credentials) or trick you into sending money (wire transfer, gift cards, crypto).

Authoritative resources: The Federal Trade Commission and the IRS maintain up-to-date warnings on refund and tax scams (FTC: https://www.ftc.gov; IRS: https://www.irs.gov/newsroom/tax-scams-consumers-should-be-aware-of). Use those sites as primary references when you’re unsure.

Quick checklist: immediate steps when you receive a refund offer

• Stop. Don’t click links or call numbers in the email or text.
• Do not provide personal, tax, or bank information in response to the message.
• Verify the sender by locating official contact information on the company or agency website and contacting them directly.
• Save the message (email headers, full text, screenshots) for reporting.

These few actions prevent the most common forms of loss and give you a documented trail if you need to report fraud.

Red flags that signal a refund scam

• Unsolicited contact promising a refund you didn’t request.
• High-pressure language: “Act now,” “expires today,” or threats of arrest or penalties.
• Requests for sensitive data (SSN, full bank routing number, login credentials) over email or text.
• Payments requested via wire transfer, prepaid cards, gift cards, or cryptocurrency.
• Sender address doesn’t match the company’s official domain (look closely; scammers often use one-letter changes).
• Links that display one address but point somewhere else; hovering reveals mismatch.
• Poor grammar, misspellings, or oddly formatted logos.

If you see any of these, treat the message as suspicious.

How to verify a return offer—step-by-step

1. Confirm identity using independent channels

• Use a bookmarked, official website or a phone number from the company’s public site. Do not use the contact details provided in the suspicious message. For tax matters, use IRS.gov — the IRS will not initiate contact by email demanding personal financial information for refunds. IRS guidance on scams and consumer alerts.

1. Check your accounts directly

• Log in to your bank, card issuer, utility, or service-provider account through a browser you previously used (not through a link in the message). If no refund or credit appears on the official account, it’s likely a scam.

1. Inspect email headers and sender domain

• In Gmail or Outlook you can view headers to see the actual sending server. Spoofed display names often hide a suspicious sending domain. If you don’t know how to read headers, forward the message (without clicking links) to the company’s fraud or support team and ask them to confirm authenticity.

1. Ask for verifiable documentation

• Legitimate organizations can provide account numbers, transaction IDs, or reference numbers you can confirm independently. Scammers avoid producing verifiable paperwork.

1. Verify via a recorded channel

• If you call an official phone number, keep a record (date, time, name of representative, confirmation number). For tax issues, the IRS publishes official phone lines and secure processes — don’t rely on emails that demand immediate action.

1. Beware of plausible-sounding scripts

• Scammers use scenarios like “we over-deposited your refund, please return the excess” or “you’re eligible for a tax credit.” Pause and verify before replying.

Examples of common refund-scam variants and how to handle them

• Tax refund phishing: An email claims you’re due a tax refund and asks for SSN and bank info. Action: Do not reply. Visit IRS.gov directly or call the IRS using contact details from IRS.gov. Forward suspicious tax emails to phishing@irs.gov and report at reportfraud.ftc.gov.

• Overpayment scams (buyers/sellers): A buyer ‘‘accidentally’’ sends excess funds and asks you to return the difference via wire or gift cards. Action: Verify the funds are truly in your account (not just a fake notification). Contact your bank and the payment processor to confirm.

• Utility or service refunds: Message asks you to provide account login to apply a refund. Action: Contact the utility via the phone number on your bill or the provider’s official website. Never hand over credentials.

• Invoice refund reversal: A vendor claims they refunded an invoice and asks for account verification to confirm. Action: Check your merchant portal and bank account. Request a written refund receipt and match against your transaction history.

What to do if you clicked a link or provided information

1. If you provided account credentials, change the password immediately and enable two-factor authentication (2FA).
2. If you gave bank or card details, contact your bank or card issuer to monitor transactions and consider closing the account.
3. Place a fraud alert or credit freeze with the three major credit bureaus (Equifax, Experian, TransUnion). You can do this through IdentityTheft.gov, which guides you through the process and helps create an identity theft report.
4. If you suspect tax-related identity theft, file IRS Form 14039 (Identity Theft Affidavit) and follow instructions on IRS.gov. Also, check the IRS Identity Protection PIN program to stop fraudulent returns filed under your SSN.
5. Document and report: save copies of the message, record dates and times, and report the attempt to:

• FTC at reportfraud.ftc.gov or IdentityTheft.gov
• IRS at phishing@irs.gov (for phishing emails) or via the IRS consumer alert pages
• Your bank and local law enforcement if you lost funds

Reporting and recovery resources (use official sites)

• Federal Trade Commission (FTC): reportfraud.ftc.gov and identitytheft.gov — step-by-step recovery plans and templates for dispute letters.
• IRS: Tax-related scam information and guidance on what the IRS will and will not do via IRS.gov (search “Tax Scams/Consumer Alerts”).
• Your bank’s fraud department and the three credit bureaus for freezes and alerts.

Practical prevention tips I recommend to clients

• Keep an annual identity-check routine: review credit reports, enable alerts on financial accounts, and use 2FA everywhere.
• Use a separate, strong password manager and unique passwords for financial accounts.
• Educate household members, especially older relatives, about gift-card scams and social engineering tactics.
• When selling goods online, use payment platforms with buyer/seller protections and confirm funds have fully cleared with your bank before refunding or shipping goods.

Useful internal resources on FinHelp

• Read our deeper guide on tax-related identity theft here: Identity Theft and Tax Fraud: How to Protect Your Return.
• For more on suspicious IRS correspondence and how to tell the difference, see: Recognizing Scam Notices vs. Genuine IRS Correspondence.
• If your refund is delayed or offset, this guide explains causes and what you can check: Tax Refund Delays: Causes and How to Check Your Status.

Final checklist before you act on a refund offer

• Can you confirm the offer through an official account or phone number you find independently? If not, don’t act.
• Are you being asked to pay or transfer money to receive a refund? That is almost always a scam.
• Do the contact details match the organization’s official site? If not, report the message.

Professional disclaimer: This article is educational and not legal or financial advice. If you’ve lost funds or believe you’re the victim of identity theft, contact your bank, a qualified attorney, or a certified financial professional for tailored help.

By following verification steps, using official channels, and keeping good documentation, you can stop most refund scams before they cause real harm. If you’re ever uncertain, pause and verify — the few extra minutes can save years of recovery work.