With year-over-year inflation already nearing 8%, it is understandable that many Americans, particularly older ones, may fall for financial-relief scams.
According to personal finance expert Susan Tompor of the Detroit Free Press, some scammers are sending letters to seniors informing them that they must "call a toll-free number to activate their cost-of-living adjustments for Social Security benefits."
"The mail looked legitimate because the scammers sent letters that included the Social Security Administration letterhead," Tompor said. "But no one needs to call a toll-free number or take any action to receive cost-of-living adjustments on Social Security benefits."
The 5.9% cost-of-living adjustment approved by the Social Security Administration last fall is automatically factored into all payments sent to the 64 million Social Security pensioners.
Furthermore, it appears that scammers are becoming increasingly skilled at creating realistic caller ID information. Scammers have even started developing phony ID badges that many federal personnel use to deceive their victims.
Scammers have been known to text potential victims a photo of a government badge to reassure them that they're the real deal, according to Tompor. Con artists may use legitimate 'badge numbers' or send emails with personal details regarding a bogus 'investigation' as attachments.
Worryingly, the number of these types of scams is anticipated to increase in the future. In fact, according to recently disclosed Federal Trade Commission data, consumers reported losing more than $5.8 billion to fraud in 2021, up from $3.4 billion in 2020. The average scam victim lost $500. In total, nearly 2.8 million customers reported fraud to the FTC last year, the highest level since 2001.
According to the FTC, impostor cams were once again the most widely reported category, followed by online shopping scams. The top five fraud categories were prizes, sweepstakes, lotteries, internet services, and business and job opportunities.
The Internal Revenue Service has also issued a cautionary warning. This tax season, fraudsters are sending emails or text messages that appear to be from the IRS about government-issued direct payments or unemployment claims, according to the IRS.
"With filing season underway, this is a prime period for identity thieves to hit people with realistic-looking emails and texts about their tax returns and refunds," IRS Commissioner Chuck Rettig noted in a statement.
"Watching out for these common scams can keep people from becoming victims of identity theft and protect their sensitive personal information that can be used to file tax returns and steal refunds."
