You've worked hard to save for retirement and build a healthy nest egg, so the last thing you want is for a scammer to take advantage of you and steal your hard-earned cash.
Unfortunately, the number of scams targeting older adults is skyrocketing, and scammers are getting savvier when it comes to tricking their potential victims. That makes it more difficult to spot fraudsters, putting workers at greater risk of losing their savings.
The scam Americans need to watch out for
There's a new type of scam going around, according to the Social Security Administration, and it involves imposters calling individuals and posing as Social Security officials. These fraudsters may tell you that you owe fines or fees, threatening to have you arrested if you don't pay immediately in the form of cash or prepaid debit cards.
In an effort to appear more legitimate, some scammers will also email fake documents that appear to be from the Social Security Administration. These documents will appear to use official letterhead with legitimate-sounding legal jargon in an attempt to convince you that the threat is real. However, they sometimes contain spelling or grammar mistakes, which should serve as a tip-off that the documents are fake.
This type of scam has exploded in popularity over the past year, with the Social Security Administration receiving 450,000 imposter-related complaints in 2019. In addition, the Federal Trade Commission reported that imposter-related Social Security scams resulted in losses of around $19 million between April 2018 and March 2019 -- and as the scam grows in popularity, that number may continue to rise.
As fraudsters get more sophisticated, it becomes more challenging to differentiate between what's real and what's a scam. Fortunately, there are a few simple tips to detect scammers and keep your money safe.
How to protect yourself from scams
One of the best ways to avoid getting scammed is to familiarize yourself with the Social Security Administration's policies.
The Social Security Administration rarely contacts people by phone; instead, you'll typically receive a letter in the mail if there is a problem that needs your attention. You'll never be asked for your Social Security number or any other personally identifiable information over the phone or in an email, and you'll also never be asked to provide payment in the form of gift cards, cash, prepaid debit cards, or wire transfers. The Social Security Administration will also never threaten you with arrest or legal action over the failure to pay a fine or fee.
If you receive a phone call that sounds suspicious, hang up and call the Social Security Administration's official phone number (1-800-772-1213) and ask about the call you just received. Some scammers are able to "spoof" the caller ID so that it appears to be the Social Security Administration calling, so don't automatically assume that the phone call is legitimate based on what the caller ID says.
Finally, if you think you're the victim of a scam or receive a suspicious phone call or email, contact the Office of the Inspector General to report it. Even if you didn't lose any money, reporting the scam helps the Social Security Administration spread awareness about the problem.
Falling victim to a scam can cost you thousands of dollars and throw off your entire retirement plan. The best way to protect yourself from scams is to stay vigilant and understand the warning signs of fraud. When it doubt, err on the side of caution -- your retirement fund will thank you.