How to Spot a Social Security Scam (and What to Do About It)

Here are a scam's red flags and how to report it if someone tries to scam you. The first things to do if a scammer contacts you: Remain calm and ignore them.

A man in a dark hoodie with the hood up uses a smartphone against a dark background.
(Image credit: Alamy)

“I manage a fulfillment center in the South that assures products ordered on e-commence websites actually reach the customer. Recently, our computer data was stolen, including names and ages of all employees. Then Marie got a phone call from someone claiming to be from Social Security. The caller wanted her to send $500, or she could be arrested for fraud. She asked me to listen, and it was an obvious scam! And then other employees got similar calls from people claiming to be with the IRS and different governmental agencies, demanding money. I think you should address these issues, as older people are often too trusting. Thanks, ‘Terry.’”

I checked in with Nilsa Henriquez, public affairs specialist in the Press Office of the Social Security Administration. “Sadly, we hear about these scams on a daily basis,” she said. “March 7 (was) Slam the Scam Day, and with the help of the Office of the Inspector General and the Federal Trade Commission, we explain(ed) to the public how these scams work and ways of protecting yourself from losing personal information and your money.”

She outlined the “sophisticated tactics scammers are using” and how to respond:

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1. These people are very convincing, playing on your emotions and fear — scaring you — so that you act without thinking and reveal personal information or send them money.

Scammers pretend to be from an agency or company you know, such as the Social Security Administration, the IRS, even your local power or water utilities. They pressure you into thinking there is a problem requiring a cash payment, via gift or prepaid debit cards, cryptocurrency or wire transfers. Your fear is their best friend, as there is usually the threat that you’ll be arrested if you do not comply.

2. If you get one of these calls, emails or letters — and anyone can, regardless of their age — first, remain calm and ignore it.

Often, it starts with a phone call, email or a text message claiming that you or a family member received an overpayment requiring an immediate refund or someone will be arrested. They want you to act quickly, so remain calm and do not speak with the caller. Also, do not click on any links in an email or text message.

Using caller ID spoofing, scammers will often pretend to be employees at SSA or the Office of the Inspector General (OIG), so the call seems legit. No governmental agency will ask you for cash, gift cards, wire transfers, prepaid debit cards or cryptocurrency.

3. If you are contacted by a scammer, report it immediately.

SSA and OIG want to know when someone has been contacted by scammers or has been scammed. File a report online with OIG at oig.ssa.gov. Report Social Security fraud on SSA’s website. Also, share this information with friends and family.

How much has been lost to Social Security scams?

The Federal Trade Commission said Social Security scams cost consumers more than $126 million in 2023, according to CBS News.

“This is a huge problem that we and other federal agencies are taking seriously,” Henriquez said. “So often, victims are afraid to admit to those closest to them what has occurred. Once you send money, the scammers know who they can victimize again. It is so sad hearing these stories of people who were so scared that, without consulting anyone, just sent money or, even worse, revealed their Social Security number.”

Red flags to look for

Scammers all share the same tactics, known as the four P’s, Henriquez said:

  • They Pretend.
  • They say, “There is a Problem,” or “You have won a Prize.”
  • They Pressure.
  • And they want a Payment.

“Anytime you receive a call that ends with the caller asking you to send money,” Henriquez said, “it is a scam. Social Security will never call, threaten or demand payment.”

Will your bank restore funds if you are the victim of a scam?

In general, banks are not responsible for refunding payments you make voluntarily, but they are responsible for restoring unauthorized withdrawals. Users of the Zelle app have greater chances of being made whole. The Federal Trade Commission discusses several avenues you can pursue in its article What to Do if You Were Scammed.

Concluding our interview, Henriquez underscored another clear giveaway that you are dealing with a scammer: “If you are instructed to tell no one about the call and to go to your bank and withdraw cash, and (the caller says) that it is to buy a car, hang up!”

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

H. Dennis Beaver, Esq.
Attorney at Law, Author of "You and the Law"

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, "You and the Law." Through his column he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."