Social Security Warns of ID Theft Scams

Beware of Fake Social Security Agents

Social Security Locked Up
SSA Advises Leave Your Social Security Card at Home. Daniel Grill/Getty Images

Almost 70 million Americans depend on Social Security benefits. Sadly, whether you are already receiving benefits or not, your Social Security account is a tempting target for scammers. The sheer complexity of this mainline federal assistance program makes Social Security accounts particularly vulnerable to hacking by cyber attackers. As a result, the Social Security Administration has identified some particularly dangerous scams you should be aware of whether you are already receiving benefits or plan to in the future.

Online Social Security Account Scam

The Social Security Administration (SSA) strongly urges all current and future beneficiaries to set up a personal “My Social Security” account on its website at SSA.gov. Having a My Social Security account, allows you to check the size of your current or future benefits and change your bank account direct deposit information or mailing address without having to visit your local Social Security office or wait on hold to speak to an agent. The bad news is that scammers also take advantage of many My Social Security accounts.

In this bit of awful, scammers set up My Social Security accounts in the names of people who do not already have them, thus allowing them to transfer the victims’ current or future benefits to their own bank accounts or debit cards. While Social Security will reimburse victims of this scam, it can take months and leave you without benefits during that period.

How to Prevent It

Scammers can only set up a bogus My Social Security account in your name if they already know your Social Security Number and other personal information, which in today’s data-breach-of-the-week environment is all too likely. So, the thing to do is set up your account as soon as possible.

Anyone over age 18 can set up a My Social Security account. Even if you do not intend to start drawing benefits for years, a My Social Security account can be a valuable retirement planning tool. When you set up your account, be sure to choose the “Add Extra Security” option on the online signup form. This option will cause a new security code to be sent to your cell phone or email ever time you try to access your account. You will need to enter the code in order to log on. It is sort of inconvenient, but far better than having your benefits stolen.

[ Risks and Benefits of Taking Social Security at 62 ]

The Fake Social Security Employee Scams

This a whole set of scams in which the perpetrator -- posing as a Social Security “agent” -- calls victims regarding their benefits. For example, the scammer may claim the SSA needs to verify the victim’s direct deposit information. In another more complex scam, the victim is told that their Social Security benefits are being cut because they have inherited a house from a relative; an event that would not result in a reduction of their Social Security benefit. To help perpetrate the fraud, the caller then places the recipient on hold and plays the same on-hold recordings actually used by Social Security.

When the scammer comes back on the line, the victim is that told proceeds from the sale of the house will be sent to them if they pay the back taxes. Of course, there are no inherited houses or back taxes.

How to Prevent It

The SSA recommends taking extreme precautions before giving out personal information. “You should never provide your Social Security number or other personal information over the telephone unless you initiated the contact, or are confident of the person to whom you are speaking,” says the agency. “If in doubt, do not release information without first verifying the validity of the call.” Which you can do by calling Social Security’s toll free number at 1-800-772-1213 to verify the legitimacy of the call. (If you are deaf or hard of hearing, call Social Security's TTY number at 1-800-325-0778.) Also be aware that scammers have also perfected the black cyber crime art of “caller ID spoofing,” so even if your caller ID says, “Social Security Administration,” it is probably just another scammer.

The Data Theft Scare Scam

Given the number of actual government data breaches these days, this scam is particularly believable and dangerous. The scammer – again pretending to work for Social Security – tells the victim that the agency’s computers have been hacked. In order find out if the victim's account has been compromised, the scammer says he needs to verify that the SSA has the victim’s correct bank account information. To set the hook, the scammer gives the victim account information he knows is incorrect. In the end, the victim is tricked into giving the scammer their correct bank account information. Bad, very bad.

How to Prevent It

The SSA recommends ignoring calls and emails regarding account data breaches. The agency never initiates contact with beneficiaries by phone or email.
Even letters regarding data breaches can be scams as scammers have gotten very good at making envelopes and letters look “official.” If you get such a letter call the real Social Security Administration at 800-772-1213 to find out if the letter is legitimate. If the letter gives any other number to call, do not call it.

The No COLA For You Scam

While it hasn’t happened since 2014, Social Security adds a cost of living adjustment (COLA) in most years based on the rate of inflation. But, when there is no increase in the consumer price index (CPI), as was the case in 2015 and 2016, there is no COLA for Social Security recipients. Scammers – again posing as SSA employees -- take advantage of these non-COLA years by calling, emailing or sending letters to victims stating that the SSA had apparently “forgotten” to apply the COLA increase to their accounts. As with other scams, victims are given a form or link to a website where they can “claim” their COLA increase by providing their Social Security Number and bank account information. By now, you know what happens next. Tell your money goodbye.

How to Prevent It

Ignore the letters, calls or emails. When and if they are given, Social Security applies COLAs automatically and without fail to the accounts of all current beneficiaries.

You never have to “apply” for them.

The New, Improved Social Security Card Scam

In this one, the scammer, again posing as an SSA employee, tells the victim that the agency is replacing all old paper Social Security cards with new high tech, “ID theft proof” computer chips embedded in them. The scammer tells the victim that they will not get any more benefits until they have gotten one of the new cards. The scammer then claims that he can “expedite” the replacement card if the victim provides their identity and bank account details. Clearly not the smart thing to do.

How to Prevent It

Ignore the claims. The SSA has plans, desire or money to replace millions of old Social Security cards or to start issuing high-tech cards. In fact, the SSA recommends you not even carry your Social Security card with you do to the threat of identity theft. Instead, memorize your Social Security number and put the card in a safe, secret place.

Report Suspected Scams

The SSA’s office of inspector general asks Americans to report known or suspected incidents of scams. Reports can be submitted online at the SSA’s Report Fraud, Waste or Abuse website.

Reports can also be submitted by mail to:

Social Security Fraud Hotline​
P.O. Box 17785
Baltimore, Maryland 21235

In addition, reports can be submitted by telephone to 1-800-269-0271 from 10:00 a.m. to 4:00 p.m. Eastern Standard Time (TTY: 1-866-501-2101 for the deaf or hard of hearing.)