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Watch Out for Social Security Scams With a COLA Twist

Government impostors are incorporating benefit boost into criminal schemes, fraud watchers warn

  An illustration of a social security phone scam includes a photo of a worried-looking woman listening to a phone caller.
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Social Security payments boosted by the biggest cost-of-living adjustment (COLA) in more than 40 years start going out soon, and beneficiaries aren’t the only ones looking forward with anticipation.

Fraud fighters warn that the legion of scammers who impersonate Social Security Administration (SSA) officials in robocalls and other communications are adapting their pitches to the looming 8.7 percent increase, claiming targets have to pay a fee or provide personal or financial data to get their bigger benefits.

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“We’ve seen actual letters sent to prospective victims, as well as text messages, emails and even a fake website, all targeting beneficiaries expecting a COLA increase,” says A.J. Monaco, special agent in charge of the major case unit at the SSA’s Office of the Inspector General (OIG).

“Scammers are trying to trick beneficiaries into providing PII [personally identifiable information] and other sensitive information, such as bank account numbers, to activate the COLA increase,” he says. “However, COLA increases are automatic, and do not require recipients to take any action.”

COLA coming soon

Social Security scams are a common form of government impostor fraud. In recent years, they have largely centered on false claims from phony officials that targets face an imminent threat of lost benefits, seized assets or even arrest due to misuse of their Social Security number.

Monaco says the COLA twist emerged in late 2021, after the SSA announced a 5.9 percent benefit adjustment for 2022, at the time the biggest jump in four decades. With inflation running even hotter this past year, the SSA pegged the COLA for 2023 at 8.7 percent.

People collecting traditional Social Security retirement, survivor and disability benefits will start seeing the bigger monthly payments in January. Those drawing Supplemental Security Income (SSI), an SSA-administered benefit for low-income people who are 65 and older or have disabilities or vision loss, get their first COLA-boosted payment Dec. 30.

“Scammers do watch the news and know that with inflation and stuff, there's more and more insecurity around Social Security benefits,” says Giulia Porter, vice president at call-blocking app maker Robokiller. “We tend to see this dynamic with scammers tending to lean into what's relevant, what's most like a big pain point for consumers at a current time.”

Robokiller estimates consumers received about 350 million fraudulent Social Security calls this year, with losses topping $285 million. Social Security scammers’ most active month, with 37.5 million robocalls costing targets nearly $32 million, was November, the month after the SSA announced the 8.7 percent COLA.

'Spray and pray'

Porter says scammers aim to reach people who are more likely to be receiving or thinking about Social Security by applying the “spray and pray” method — “where they’re just blasting robocalls out and hoping that someone answers” — to area codes with older populations, using caller ID spoofing to make their calls appear to be of local origin or from government entities.

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“Scammers can easily look up data on where are the most ‘retired’ communities in the U.S.,” she says. “What they’re hoping for is that you’re rushing, the phone rings, and maybe you just registered for Social Security or something about Social Security was in the back of your mind, something that maybe you read in the news.”

What’s important to remember is that “if you're getting a robocall on behalf of Social Security, any message at all, whether it's scare tactics, whether it's just kind of too-good to be true messaging, it probably is a scam,” Porter adds. “Social Security will never just call you out of the blue.”

OIG offers these additional tips on averting government impostor scams:

  • Pause and take a breath. Scammers seek to cause a strong emotional response. Stop and think. Better yet, hang up or ignore the message.
  • Don’t transfer money. Someone demanding immediate payment of a fee or debt by gift card, cryptocurrency or wire transfer is a sure mark of a scam.
  • Be skeptical. Scammers adopt trappings of officialdom, like real-sounding titles and bogus ID numbers, to persuade you they’re legit. If they transfer you to another “government official” to confirm their story, it’s almost surely an accomplice.
  • Don’t provide personal or financial data like Social Security or bank account numbers, even the caller has some of your information already.
  • Block unwanted calls and text messages.
  • Don’t click on links or attachments in texts or email from unfamiliar senders.

If you are targeted by a Social Security scam, report it to OIG and the Federal Trade Commission.

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