COLA Opens Door to Cons

Crooks may call demanding you give personal information or forgo the raise

by: Sid Kirchheimer, from: AARP Bulletin, October 27, 2011

En español | Watch out for COLA cons.

As history shows, the deceptive dogs of the scamming world are devout newshounds — they use what's in the headlines to craft their cons. And with the Oct. 19 announcement of the first COLA (cost-of-living adjustment) in two years, Social Security is in the news.

So be prepared for fraudsters posing as Social Security Administration employees who call with word that you must confirm personal information or forgo the COLA boost. Those lies will likely begin closer to January, when the 3.6 percent increase takes effect.

The crooks use the news; they're also constantly fine-tuning tried-and-true Social Security scams. Within hours of the announcement, impostor scammers hit the phones with a sneaky new variation on getting your bank account number.

Social Security Cards and U.S. dollars-Socialsecurity cost of living adjustment scam

With the COLA in the news, assume that any unsolicited phone call, letter or email is from a scammer. — Photo by Scott Speakes/Corbis

They tell you it's needed for direct deposit of benefits. But instead of flatly asking for account details — perhaps knowing that many of the 55 million Social Security recipients know you should never provide such sensitive data to callers — they use a multiple-choice maneuver.

First, a list of area banks is read to you, and you're asked to identify which is yours. With the bank name given, the scammers then provide a series of numbers, asking which match those on your checks.

The intended purpose, theorizes Neal Buccino of the New Jersey Division of Consumer Affairs, is that you'll just say, "No, my number is …" and read it out. Confirming the exact account number, of course, can allow scammers to deplete your funds.

Luckily, Buccino's agency was tipped off to this ruse the day after the COLA announcement by a resident who happened to have just attended a fraud prevention seminar and smelled a rat … but only after she confirmed the name of her bank to a caller.

Buccino's agency immediately issued a warning aimed at safeguarding other off-guard New Jersey residents.

Also, just after the COLA increase announcement, SSA officials in Florida were warning about phone calls promising — for a fee — services that are provided at no cost by the real SSA.

In another variation, you may be told you can get a new or replacement Social Security card or to have the legwork done to secure "new" or "better" benefits.

Or that you qualify for a special tax refund for years when there was no COLA increase, but you'll need to file new tax forms — for a fee — in order to get it. These schemes can saddle you with identity theft if you provide the requested personal information — and with the fee you get charged for the privilege of handing the information over. Of course, there is no such refund available.

A legitimate SSA rep may contact you by phone or letter in response to an application for benefits. But with COLA in the news, assume that any unsolicited phone call, letter or email is from a scammer.

Also of interest: What happens to stolen personal data? >>

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.