Growing wave of Social Security imposters overtakes IRS scam
By Emma Fletcher
April 12, 2019
Claiming to be a government authority is a tried and true way that scammers trick people into sending money. Among the most common government imposters have been scammers pretending to be the IRS – until now. In the past few months, the FTC’s Consumer Sentinel Network database has seen Social Security Administration (SSA) imposter reports skyrocket while reports of IRS imposters have declined sharply. In the shady world of government imposters, the SSA scam may be the new IRS scam.
SSA imposters tell you your Social Security number has been suspended because of suspicious activity, or because it’s been involved in a crime. They ask you to confirm your Social Security number, or they may say you need to withdraw money from the bank and to store it on gift cards or in other unusual ways for “safekeeping.” You may be told your accounts will be seized or frozen if you don’t act quickly.
These scammers often use robocalls to reach people, and the message can be hard to ignore. You may be told to “press 1” to speak to a government “support representative” for help reactivating your Social Security number. They also use caller ID spoofing to make it look like the Social Security Administration really is calling. With such trickery, these scammers are good at convincing people to give up their Social Security numbers and other personal information.
As the graphic shows (top), people reported the IRS scam (in blue) in huge numbers for many years, but the new SSA scam (in orange) is trending in the same direction – with a vengeance. People filed over 76,000 reports about Social Security imposters in the past 12 months, with reported losses of $19 million.1Compare that to the $17 million in reported losses to the IRS scam in its peak year.2 About 36,000 reports and $6.7 million in reported losses are from the past two months alone.
Just 3.4% of people who report the Social Security scam tell us they lost money.3 Most people we hear from are just worried because they believe a scammer has their Social Security number. But when people do lose money, they lose a lot: the median individual reported loss last year was $1,500, four times higher than the median individual loss for all frauds.4 All age groups are reporting this scam in high numbers, with older and younger adults filing loss reports at similar rates.5
People report sending money in unconventional ways. Most often, people say they gave the scammer the PIN numbers on the back of gift cards. Virtual currencies like Bitcoin come in a distant second to gift cards: people say they withdrew money and fed cash into Bitcoin ATMs. With both methods, the scammer gets quick cash while staying anonymous, and the money people thought they were keeping safe is simply gone.
Here are some tips to deal with these imposters:
Report government imposter scams to the FTC at FTC.gov/complaint.
- Do not trust caller ID. Scam calls may show up on caller ID as the Social Security Administration and look like the agency’s real number.
- Don’t give the caller your Social Security number or other personal information. If you already did, visit IdentityTheft.gov/SSA to find out what steps you can take to protect your credit and your identity.
- Check with the real Social Security Administration. The SSA will not contact you out of the blue. But you can call them directly at 1-800-772-1213 to find out if SSA is really trying to reach you and why.
- Talk about it. People recognize the IRS scam, but many are getting caught off guard by these new imposters. You can help by telling people that the SSA scam is a new version of the IRS scam.
To learn more, visit ftc.gov/imposters.
FN1 FTC was unable to collect reports directly from the public during the government shutdown. Reports collected during that period were provided by Sentinel data contributors.
FN2 From October 1, 2015 to September 30, 2016, about 140,000 reports of IRS imposter scams were filed and collectively indicated $17 million of loss.
FN3 For comparison, 2.8% of IRS scam reports filed from January 2014 through March 2019 indicated a loss. In 2018, 25% of all fraud reports indicated a loss.
FN4 Median loss calculations are based on reports submitted in 2018 that indicated a monetary loss ($1 - $999,999). The median reported individual loss to all frauds was $371 in 2018.
FN5 Age comparison based on the number of Social Security imposter reports that indicated a monetary loss per million population by age. People who said they were 20 – 59 filed loss reports at a rate of 8.9 reports per million people in this age group, while people who said they were 60 and over filed 10.0 loss reports per million people in this age group. Population numbers obtained from the U.S. Census Bureau: U.S. Census Bureau, Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties and Puerto Rico Commonwealth and Municipios (June 2018). Not all reports include usable age information.
I really, really hate fast operators who prey on the elderly. I have a close friend, an elderly woman, who shares all the scam mail she gets with me, so I have a window into a world that most working-age folks are totally unaware of.
Below is an example of a really nasty bit of business, an offer pitching what is supposedly a way to buy an extended warranty on your old car (it's not really a warranty but a service contract, but most people call it a warranty or extended warranty).
What it really is instead is a way for them to hook a suction line up to your bank account and drain it.
I know this for several reasons.
One is that my friend's car is a mid-1990s sedan. There is no way in hell that anyone honest will sell her a service contract to fix problems with a car of that age. It would never pencil out.
Two is that, while I was born at night, it wasn't last night. I have had countless elders come to me to complain about "warranties" that refused to pay when the coverage the elder thought they had purchased was invoked.
This whole offer, and especially the table on the back, is the work of sophisticated con artists who know that if they can get elders on the phone, the elders are often vulnerable to sales pitches that play on the fixed-income elder's fear of unexpected/unplanned expenses. The people who staff the phones for these come-ons are really, really good at being convincing and sounding utterly sincere and honest. They will talk your ear off about the high cost of auto repairs, and how their "product" would give the caller "peace of mind."
That's what this scam is about -- playing on the fear that folks on fixed incomes have of repair bills, just like the horrible "water supply line" warranties that were being sold around here a few years ago.
Believe me, that supposed "example" on the second page of the piece is PURE FICTION and is intended to give the reader the FALSE impression that they are selling something that would PAY for those repairs. (It is a lie, in in other words.)
If you EVER get an offer like this that tempts you to respond, DON'T DO IT.
Send it to me instead -- I'll gladly review it and discuss it with you at no charge if you let me use it as a consumer education example to help others.
And if you can ever show me a mass-mailing come-on that targets the elderly that actually proves to be actually be a good deal after I look into it, I'll not only tell you it seems legit, but I'll give that company a public pat on the back for offering elders a fair deal that benefits them, and not just the company trying to take their money.
I have had a number of very unhappy consumer victims of scams where they received very convincing calls from someone with an authoritative voice who told them that they were going to be arrested/audited/exposed as a liar/cheat/unfit parent/tax fraud unless they went to Apple (or Google or Wal-Mart) and bought gift cards and gave the codes from the cards to the person calling.
It's easy for you and I to sit back and say "That's an obvious scam" but it's not obvious sometimes, when you're tired and don't expect someone to call and threaten you. Once your amygdala fear response kicks in, your reasoning declines dramatically.
So just remember -- just like money never calls you on the phone, only scammers demand payment in gift card codes.
Never buy a gift card because someone threatened you! (Unless it's your wife.)
Scammers demand gift cards | Consumer Information
The short answer to "How do criminals steal from the elderly?" is "by phone, mostly."
And new phone-based payment services that let you send money to others without even leaving your house make it crucial that you remember this key survival rule:
MONEY NEVER CALLS YOU ON THE PHONE.
And if you think you've found the exception to this rule, call an attorney or a trusted friend with good sense to discuss the offer before you do ANYTHING that the caller suggests. If you have truly found the exception to the rule, it'll wait for you to conduct a thorough investigation.
If you feel ANY pressure to seize the opportunity at all, that's the clearest sign of all that it's a SCAM.
Remember, the phone and internet means just one thing for sure:
Every criminal in the entire world is just one click or phonecall away from you.
In years past, you pretty much only did business with people nearby; now you can be ripped off by someone from a country you can't even pronounce just as easily as by someone who calls you from a boiler-room scam operation in your own hometown.
How Criminal Steal $37 billion a year from the elderly
Remember -- you have EVERY RIGHT to take the paperwork home from a car dealer so you can get help reading and understanding it at your leisure before you sign!
A car salesman who says "I can't hold this car for you if you leave" is a liar trying to pressure you into signing on the dotted line without having help reviewing the contract.
FTC press release:
Not all dealers play by the rules. In a case announced today, the FTC alleges that Tate’s Auto Center of Winslow, Inc. — as well as related dealerships in Arizona and New Mexico and their owner and manager, Richard Berry --
* used deceptive advertising to get people in the door,
* failed to disclose required financing terms, and
* frequently falsified consumers’ income and down payment information in an effort to close the deal.
Instead of using the income information people gave, Tate’s often inflated numbers to make it look like people had higher monthly incomes.
Note the ways to tell this is phony -- the "Noreply" email is misspelled, and the "simply call us at" phone number is bogus.
The most important tip, though, is to ALWAYS look at the sender id: email@example.com is NOT Netflix.
Legit businesses do NOT send this kind of thing.
If you were to click on those links, you'd be taken to a very convincing phony website that would collect your attempts to log in, which would capture your actual netflix login and username.
It helps that I don't have a Netflix account, but it's important to recognize all spearfishing attacks.
These scammers trying to pry your personal information out of you by making it appear that they're from the government.
On this one, note the barely readable small print disclosure that they're not, which is at the bottom and is about 1/20th as dark as the typeface that says "GOVERNMENT FUNDS AVAILABLE FOR FINAL EXPENSES" that appears at the top, next to the Pennsylvania Avenue address in Washington DC ( a nice touch, don't you think?)
Note the deceptive wording of the interior:
The government has made funds available for final expenses. Also available in your state, is a program designed to pay for what the government funds do not pay for your final expenses. If you qualify, this program can pay 100% of all funeral and final expenses for each person covered.
The comma after in your state is a nice touch for illiteracy.
Note the attempts to make it seem to come from a government source
The folks who prey on the elderly -- the Elderscammers -- never tire of trying to make their scam letters appear to come from an official source (anything that will get you to open them). When you get mail in an envelope that looks like this, your best bet is probably to recycle it immediately without even opening it.
If you are really torqued about their deceptive technique and want to make it a bit more expensive for them, here's one thing you can do: Open the envelope, but only so that you can find out if there is a postage-prepaid "Business Reply Envelope" inside (there often are). If there is a BRE, take a dark marker and write "STOP SENDING ME JUNK" on the reply card, and draw a big X over the part where they want you to give them all your personal information. Then stuff everything they sent you into the BRE, seal it, and drop it in the mail. This has proven remarkably effective at getting them to stop sending me any such junk. Sadly, all my elderly neighbors and friends keep me well supplied in examples of this kind of scam. (This one was another come-on for funeral expenses insurance, the biggest ripoff this side of waterline insurance plans.)
Mixed in with the many honest businesses, I'm sad to say that there are a TON of ethically challenged businesses out there too. They especially prey on elders, offering them outrageously overpriced goods and services, using all the time-tested tricks of the trade, trying to make it look like they are doing you a favor, and that you might have to "qualify" to do business with them -- when the only qualification is excessive trust in strangers by you, and a willingness to give out private information to total strangers. These people will use any information they can get to take advantage of you (and they will sell and trade that information to similarly exploitation-minded outfits -- along with the key fact, that you were so foolish as to respond to their mailing).
There's a good saying that "Good deals don't call you on the telephone" and the same goes in spades for junk mail like this. Honest businesses don't try to make money off you by selling you wildly overpriced insurance. I wish there was a way to require outfits like this to put a skull-and-crossbones watermark on every page of every letter they send out, because then you'd have a chance of realizing what pirates they are.
John Gear Law Office -