A tax scam is luring unsuspecting people into receiving stolen funds and sending the money overseas.

Police said the "money mule" scam involved a member of the public receiving a phone call, in which they were told a tax rebate was waiting for them but would only be released if they donated a set sum to a charity in India.

"By agreeing to donate, a sum of money is placed in the person's bank account and instructions are then given to withdraw the money and forward to a charity in India via Western Union," police said.

"Police would like to reiterate that any situation where you are expected to donate to a charity or cause in order to receive a tax rebate is not legitimate."

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Police urged people who received the dodgy phone calls to hang up and contact their local police station. Those who believed scammers had already conned them were also encouraged to contact police.

"Members of the public are reminded to exercise caution when receiving unsolicited phone calls or emails which [aim] to give them a benefit," police added.

People should never give out any personal details over the phone, including bank account details, pin numbers, passwords or personal information.

"If you have any doubts about the validity of any correspondence, ask for the caller's name and then call the company's generic phone number listed on their website or in the phonebook and ask to be transferred back to the person," police said.

"If something seems too easy or too good to be true, it often is, and you should always seek a second opinion from a loved one, close friend, or someone you trust," police said.