It starts with a phone call. A brisk and authoritative voice informs you that he’s calling from the Social Security Administration and that a warrant has been issued for your arrest.
Before you can collect your thoughts, the “officer” is telling you federal marshals will be at your door in minutes to take you into custody. The only way to avoid immediate arrest is to provide your bank PIN to pay the fine.
That may sound like the beginning of a movie. However, this scam happens every day to ordinary people, particularly around tax time. It is one of the most common — and costly — phishing scams and has defrauded people out of millions of dollars.
Understanding how these scams work can help you or your family avoid falling prey to fraudsters — or help you or they recover quickly.
How Social Security fraud works
Social Security scams are rampant. Last year, the FTC received 647,000 complaints about imposter scams, and victims lost $667 million. Government imposter fraud — in which scammers represent themselves as officials from Social Security or other agencies — rose by 50% last year.
The reason for the increase is unfortunate: These scams work because they’re convincing. For example, scammers can use technology to display an actual Social Security Administration phone number on your caller ID make the call seem genuine. Recently, scammers have taken to attaching letters and reports with official-looking letterhead to create a sense of credibility.
These schemes have a common thread: They pressure you to act quickly or face extreme consequences. The caller or email may threaten you or your family with arrest or cancellation of your benefits if you don’t pay a fine immediately.
Consider this actual voicemail a First Republic Bank employee received from a scammer: “If we do not hear from you, your Social Security will be blocked permanently. To connect with the officer, press 1 now to be automatically connected with a concern department. This automated system will connect you with the officials.”
That may sound like an official call, especially if you’re caught off-guard. If you press 1, you could find yourself talking to an “officer” who directs you to pay your fine via a retail gift card, a wire transfer, a prepaid debit card or cryptocurrencies or by mailing cash.
If you’re thinking, “No government agency would ask someone to pay a fine with a gift card from a retailer,” you’re right. Scammers depend on fear and pressure to block victims’ common sense. Often victims breathe a sigh of relief after paying a fine, only to recover a minute later and ask, “What just happened?” with a sinking feeling in their gut.
Signs of a scam
The best defense is to be vigilant, aware of red flags, and listen to your gut if something doesn’t feel right. Any of the following should be an indication that a caller who identifies themselves as a Social Security official may not be legitimate:
- Pressuring for an immediate or urgent response
- Demanding sensitive information like your Social Security number
- Demanding nontraditional payment methods like gift cards or cryptocurrencies (scammers ask for these kinds of payment because they’re hard to trace and recover)
- Threatening to arrest you if you fail to act promptly
- Promising a benefit increase or other assistance in exchange for payment (Social Security will never do that)
If there’s an actual problem with your Social Security, the agency will typically send you a letter so you can deal with it in a calm, methodical manner — which is the opposite of what scammers want. Be aware that the Social Security Administration doesn’t suspend, revoke, block or freeze Social Security numbers.
How to avoid or respond to a scam
Always be wary of out-of-the-blue, unsolicited communications, whether it’s via mail, text or phone call, especially if it raises any of the points above. Take the following steps:
- If you receive a questionable call, hang up.
- Contact an actual representative of the Social Security Administration at (800) 772-1213 to find out if there is a legitimate situation you need to deal with.
- If you receive an email or a text, do not click any links, and delete it. Those links can take you to fake but legitimate-looking Social Security sites that ask for personal information and may download viruses or spyware onto your computer or phone.
- If the fraudster claims to be with Social Security, report the scam to the Office of the Inspector General by calling (800) 269-0271 or going online.
- Call your bank immediately if you’ve given out banking information to a potential scammer. If you have any concerns, contact First Republic at (888) 408-0288.
- Monitor your statements and credit reports. Everyone is entitled to three free credit reports a year from com, regardless of the credit bureau.
- Call to have a fraud alert or credit freeze placed on your file if you believe your Social Security number may have been compromised. Be sure to call all three bureaus, not just one:
- Equifax: (800) 525-6285
- Experian: (888) 397-3742
- TransUnion: (800) 680-7289
Share this information with family and friends to help prevent them from falling victim to scams as well. If more people are aware of these tactics in advance, fraudsters lose the advantage of surprise.
For First Republic’s resources on what to do if you’ve been the victim of fraud or attempted fraud, click here.