4 Social Security Scams

Tricks Social Security Impostors Use to Scam Taxpayers: Internet ScamBusters #275

Could you tell if you were about to become the victim of a
Social Security scam? It can happen, even when you’re young.
(Be sure to tell your parents and grandparents about these
scams. And if you don’t live in the US, similar scams are
likely in your country as well, so understand the principles
below.)

Few of us know specifics when it comes to how Social Security
works — to the average person it’s just a large government
program.

We’ve never done an issue on Social Security scams, so we
decided to rectify that today. Here are four of the most
popular Social Security scams so you can be on your guard.

But first, we want to thank those of you who provided a photo
sharing question when we asked a couple of weeks ago. We got
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target="_blank">http://www.photosharingnuggets.com/question.html

Next, we urge you to take a look at these top articles from our
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use your href="http://www.creditcardtipsetc.com/low_interest_credit_cards_and_uncle_sam.html"
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The Secret of Creating Awesome Photo Puzzles: Tips to help you create
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target="_blank">Buying a photo printer might be a better option
if you fit this profile.

And now for the main feature…


4 Social Security Scams


You use your Social Security number for your identity, to get a
job, and to apply for Medicare and Social Security as you
become older. Unfortunately though, there are a lot of Social
Security scams.

Here are some of the most common scams related to Social
Security and how to bust their cover.

1. Don’t Trust the Letterhead

This is probably obvious, but just because a piece of paper
says Social Security or has government symbols in its
letterhead, that doesn’t guarantee it’s authentic. Every year
consumer organizations get complaints of direct mailings that
appear to be from the Social Security Administration but
aren’t.

In one such scam, the letter offers to provide the consumer a
service — like obtaining a Social Security number for a
newborn, notifying Social Security of name changes for newly
married persons, or obtaining personal earnings and benefit
estimate statements — for a fee.

These services are actually already provided by the Social
Security Administration — free of charge. Sometimes these
companies just want the fees (so you’d only lose money), but
sometimes they try to steal your identity as well.

Action: Throw out the letter and contact Social Security
directly by phone at 1-800-441-2555 or visit the target="_blank">Social Security Administration’s website.

2. Getting an Extra Social Security Check

In another direct mail scam, one that targets seniors, the
letter offers its recipient an extra Social Security check. All
you have to do is send a filing fee. The letter will ask you
for money, for your bank account information or for your Social
Security number to help with the application.

This is an attempt to steal your money, and usually your
identity, by getting your personal information.

The Social Security Administration does not ask you to send
them your Social Security number to get a check because they
already know it.

People who get Social Security do receive legitimate mail from
the Social Security administration when their benefits
increase. Or they can get a statement on taxes paid and future
benefits due.

Important: Be suspicious of any letter that asks for money or
for you to send personal information back. Shred such letters
or send them to the Social Security Administration for
investigation.

3. A New and Better Social Security Card

Likewise, consumers should be VERY wary of phone solicitations
that ask for personal information for Social Security purposes.

Last year a Pittsburgh paper reported on a scam in which
seniors contacted by phone were told they were required to get
a new Social Security card.

The caller asked for Social Security and bank account numbers
to help process their requests.

“This is purely an attempt to obtain your Social Security
number and other information for the purpose of stealing your
identity,” State Attorney General Tom Corbett told the
Pittsburgh Post-Gazette.

If you get a call like this, hang up the phone. If you fall for
the scam, immediately contact your bank and advise them of what
has happened. You should also ask the three credit reporting
bureaus to place a fraud alert or credit freeze on your
account.

Those bureaus are: Equifax, 1-800-997-2493; Experian,
1-888-397-3742; and TransUnion, 1-800-916-8800.

4. The Tax Refund Scam

In this scam, a Social Security recipient is told she can get
help in preparing her tax return and promised she will get a
refund.

This may sound innocent enough — many communities have
legitimate programs like this where trained volunteers prepare
taxes for low income or elderly individuals.

But in this case the taxpayer gets fleeced. Here’s what
happens:

The victim is told to get the last three year’s worth of 1099
statements from Social Security. By law the Social Security
Administration must provide the statements, even if they
suspect a scam.

Using the statements, the scam artist prepares three years
worth of tax returns for a fee. He incorrectly reports these
three years of Social Security benefits, claims the standard
deduction, and creates a bogus refund amount.

The taxpayer files the faulty return and sometimes receives her
tax refund. But later the IRS discovers the error and the
taxpayer is forced to pay the money back, along with interest
and penalties.

Meanwhile the tax preparer has skipped town with the $40 to
$100 fee charged for their “service.”

The Social Security Administration is warning all taxpayers
requesting their 1099 statements to look out for this faulty
tax preparation scam. If you have any doubts, contact a second
tax professional for advice.

Finally, you can check out more information on a Social Security scam
alert at href="http://www.scambusters.org/socialsecurityadministration.html">
Social Security Administration Scam Alert, Am I Really Getting More
Spam, and am I Being Too Paranoid?

That’s all for today, but we’ll be back next week with another
issue. See you then!