Millions, possibly billions, of dollars every year
Social Security fraud statistics can be difficult to pin down. Some are grouped inside a larger category that the Social Security Administration (SSA) calls “improper payments,” which includes everything from innocent mistakes to willful fraud. The SSA estimates that it made about $7.9 billion worth of improper payments during the 2019 fiscal year.
Social Security-related fraud can also take other forms, such as identity theft using stolen Social Security numbers and scams involving bogus phone calls and emails purporting to be from the SSA. Collectively, these frauds cost the U.S. government and individual taxpayers millions, if not billions, of dollars every year.
Though best known for its monthly payments to retirees, the SSA is also responsible for a number of other programs, including survivor benefits for widows, widowers, and dependents of eligible workers; Social Security Disability Insurance (SSDI) for people with disabilities; and Supplemental Security Income (SSI) for people with limited income and financial resources. Any of these programs can be subject to numerous types of fraud.
According to the SSA, the list of potential frauds includes:
Because people are often asked for their Social Security numbers to identify themselves in financial transactions, the numbers are a favorite target of identity thieves. Social Security numbers that have been obtained through theft or trickery can be used to obtain credit cards or other loans, open bank accounts, and even to apply for a job.
Criminals also use illegally obtained Social Security numbers to file false income tax returns and collect fraudulent refunds. The Internal Revenue Service (IRS) uncovered $2.3 billion in tax fraud schemes in 2020.
The perpetrators of these frauds aren’t just small-time crooks but often “large criminal enterprises with individuals at all stages of the scheme: those who steal the Social Security Numbers (SSN) and other personal identifying information, those who file false returns with the Internal Revenue Service (IRS), those who facilitate obtaining the refunds, and the masterminds who promote the schemes,” the U.S. Department of Justice says.
Individual taxpayers often discover that their Social Security number has been stolen only when they file their own tax returns for the year and receive a notice from the IRS that there appears to be a problem. If they are due a legitimate refund, then they can still receive it, but only after completing the necessary steps outlined by the IRS. Ultimately, U.S. taxpayers as a group are stuck with the bill for fraudulent refunds.
Scam artists not only impersonate Social Security employees but also can “spoof” your Caller ID so it appears that the call is coming from a legitimate Social Security phone number.
Individual consumers can also be the victims of Social Security-related frauds. Particularly common are imposter scams, where a caller (either a real person or a robotic voice) will claim to be from the SSA. The goal often is to obtain the victim’s Social Security number and other personal information for identity theft purposes. But in other cases, the caller will demand money from the victim—for example, threatening to cut off their Social Security benefits if they don’t comply.
Similar imposter scams are carried out through email, text message, or regular mail. Through the second quarter of 2021, the Federal Trade Commission (FTC) collected 28,944 reports of imposter scams involving Social Security, with total losses of about $12 million.
And, of course, untold numbers of scam victims never file reports, often out of embarrassment.
If you’re a victim of Social Security fraud, or if you believe you have witnessed it, then you can contact the fraud hotline of the SSA Office of the Inspector General (OIG) at 1-800-269-0271 or file a report online at the OIG website.
You can also file an identity theft report at IdentityTheft.gov, an FTC website that helps consumers report ID theft and set up a recovery plan.
Article Source: investopedia.com
In the digital era, securing your finances against online fraud is paramount. Before making any financial transactions on a website or platform, it's important to verify its credibility and legitimacy. To begin, you can check if the website you're considering appears on our public database of known scam sites by clicking "View Scam Sites" below. This database is regularly updated and maintained by our team. Alternatively, you can click "Submit a Request" below to complete a form and request an evaluation from our team of experts. We will conduct a comprehensive assessment to determine if the website is legitimate, checking for any scams, fraud, or illegal activities. Don't take any unnecessary risks with your finances - take action today and submit a request or view our list of scam sites.
Join our whitelist!
Palette Party collection
To join the whitelist, start by following us on our social networks. Then, simply fill out the relevant form in our #join-the-whitelist Discord channel, and we will review your eligibility for whitelist access.