Susan Tompor

Detroit Free Press

Maggie Passino, 20, received a string of frantic calls on her first day of college that scared her into throwing away $1,762 in savings. She wanted to go to college, not to jail, so she paid up.

It all started with a cellphone call that she initially ignored. But others promptly followed.

"They kept calling and calling and calling until I picked up," said Passino, a freshman at Virginia Tech University in Blacksburg, Va.

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The man claimed to be from the Internal Revenue Service and had her name and home address. She owed back taxes and taxes for school, he said, and she needed to pay now or be arrested.

"He said, 'You're going to be receiving a call from 911 and if you pick that up, you'll be arrested,' " said Passino, who is majoring in agricultural technology. Sure enough, 911 appeared on her phone.

"I'm a college student. Being arrested for a college student looks really terrible, so I was really worried," she said. "That can affect your financial aid ... really mess up your life."

So ultimately, she drove to a Kroger store and put her money on iTunes gift cards, just like the IRS impostor instructed.

Does it make sense that the IRS would tell people to drive to a Kroger and put money on iTunes gift cards to pay a tax bill?

"I was freaked out," she said. "It was horrible. It's the first day of classes — and everything is already in jeopardy. ... They've got the intimidation thing down for sure."

She put $500 on three iTunes cards and $262 on a fourth, using her debit card.

The IRS impostors have been dialing for your dollars since at least October 2013. Many of us hang up or just don't answer. But the calls keep coming. And con artists do trick some people into handing over a couple thousand dollars.

The crooks seem to have it down to a science.

The persistent nature of this scam raises a key question: Why aren't we seeing more warning signs near the register saying, "If you're putting money on a prepaid card to pay for taxes, watch out."

To be sure, some retailers and banks try to train their front-line employees to watch out for consumers who may be potential victims. But Passino said she received no questions from a clerk who rang up her purchase.

I did not see any signs near the gift card racks at a few stores I visited this week. In the past, I have seen some consumer alerts posted at drugstores warning that Green Dot MoneyPaks can be requested by phone scammers pretending to be from the IRS, utility companies and the U.S. Immigration and Naturalization Service.

It wasn't by chance that the young college student was told to drive to Kroger, which stocks iTunes cards that can range in value from $15 to $500. Some other stores I visited in metro Detroit, including Target and Meijer, only stocked $100 iTunes cards or cards for smaller denominations.

So you might look odd buying 17 cards at $100 each. Or maybe not, depending on the clerk.

Once scam victims put money on iTunes cards, they're asked to read the 16-digit code off the back of the card and scammers can get the cash in a quick, clean, often untraceable way — and leave their victims with nothing.

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Sometimes — as was the case with Passino — once the victims pay, the con artists ask them to put more money on more gift cards or iTunes cards. Passino did not fall for that one.

Scam alerts

I've written numerous columns in the past three years warning consumers about the impersonation scams. I first wrote about scammers turning to iTunes cards in April.

Many are trying to get the word out, as well.

The Federal Trade Commission put out a warning online in May on the use of iTunes cards by scammers who can pretend to be from the IRS or maybe even pretend to be a grandchild in trouble.

The AARP put out a scam alert in July about con artists demanding money on iTunes cards.

The Michigan State University Police Department, for example, tweeted in mid-September that students should be aware that scam artists may target students and claim to be from the IRS.

Apple has posted a warning online, saying a "string of scams are taking place asking people to make payments over the phone for things such as taxes, hospital bills, bail money, debt collection and utility bills."

Apple said it's offering guidance to retailers about ways to try to prevent customers from being scammed. If there are still funds on a victim's cards, Apple will work with its re-sellers to help ensure funds are returned, according to an Apple spokesperson.

But basically, consumers find themselves out of luck once those numbers are read off and scammers get the cash.

Here are some of the latest IRS-related scams:

Fraudsters are calling college students pretending to be from the IRS and demanding payment on a so-called federal student tax, which does not exist.

The IRS has warned about an increase in robocalls, in which scammers leave urgent callback requests and sometimes threaten that the taxpayer will be sued if he or she doesn't call back to settle the “tax bill.”

Gift card problem

Because I'm not holding my breath about catching these crooks soon, I'd say Apple and others must do more to warn consumers — maybe put a warning label on iTunes gift cards or supply retailers with point-of-sale signs.

Keith G. Dailey, senior director of external affairs for Kroger, said the supermarket chain, like other retailers, is working closely with experts and Apple to find solutions.

"This is a unique iTunes gift card problem. These cards are being exchanged, often overseas, as currency," Dailey said.

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"Across the industry, we don't see the level of fraudulent activity with other gift cards that we see with iTunes cards," he said.

Dailey said one challenge with signage is that customers who have been convinced by scammers to buy the iTunes cards often do not notice warning signs.

"We are examining placing material indicating the potential for fraud with iTunes gift cards, and we also are working with Apple on alternative solutions to deter this activity," Dailey said.

In some cases, Kroger cashiers have been able to help customers avoid losing thousands of dollars on iTunes gift card scams, including stopping an 86-year-old grandfather in Ohio from "helping" fraudsters who were pretending to be his grandson. Another grandmother in Ohio was stopped from putting $2,000 on iTunes cards, as well.

Limited refunds

Kroger and partners, he said, can refund money only in limited cases when the money is still available on loaded cards. But if the fraudster has removed the money, the chance of recovery is minimal.

I don't see phone or e-mail scams disappearing, especially considering that crooks get personal data via security breaches and the stuff we post about ourselves on social media.

Passino, who was working to save money for college, said she never read about this scam. She didn't call her dad, she said, because the callers said the police would come quickly if she tried to contact anyone.

The con artists play into the confusion young consumers have about taxes, too. She worried that maybe the right amount of taxes weren't paid since she did a lot of work for cash in her teens, such as babysitting and cutting lawns.

Now, she is willing to admit her mistake in public because she said she's getting nowhere closer to getting any money back after filing police reports, complaining to Kroger, going to the bank about her debit card or trying to reach Apple.

"On a corporate level, there really is no protection for the consumer for incidents like this," she said. "It's incredible to me that there isn't a warning next to the iTunes cards."

Contact Susan Tompor: 313-222-8876, stompor@freepress.com or on Twitter @Tompor