By Terrence Kane
WASHINGTON – Officials from the Social Security Administration testified before the Senate on efforts to combat the growing problem of fraudulent call scams impersonating SSA employees.
The hearing focused on the main efforts to combat Social Security impersonation scams that are an emerging and persistent issue. These efforts include educating the public to identify fraudulent calls and pursuing legal action against the telecom companies that support them.
The Senate Select Committee on Aging chose this topic as the first for a hearing in 2020, highlighting its rapidly growing importance. Over the past three years, Social Security scams have become one of the most prevalent issues facing the American public, particularly elderly and disabled Americans.
“Reports of the SSA scam barely registered as recently as 2017,” Chairwoman Susan Collins (R-ME) said in her opening statement, “but then it began to take off, cracking the top ten scams reported to our committee’s fraud hotline in 2018 and becoming the number one reported scam last year.”
The scams have resulted in the loss of $38 million dollars over the course of 2019 alone, according to Collins. However, Collins believe this is not representative of the whole story and may only be the “tip of the iceberg”.
The scams typically consist of a fraudster assuming the identity of an SSA employee and contacting Americans with claims that their social security numbers have been compromised. The fraudsters often rely on intense language and detailed stories to frighten their victims into compliance with the aim of stealing their life saving or their identity.
The hearing featured testimony from an assortment of experts in the field of consumer protection, as well as emotional testimony from one of victim of a scams. Machel Andersen of Utah recounted the story of how she was robbed of over $150,000 dollars by a scammer who intimidated her with threats of legal action against her and her family.
“Then he told me some bad news. A car registered in my name was found with blood all over it at a crime scene near the Mexican border,” Andresen said detailing the story a fraudster used against her, “Worse, he said that my social security number had been used to set up multiple bank accounts associated with a drug cartel.”
Fraudsters, like those that targeted Machel Andersen, are often able to make their calls appear as if they are coming from Social Security. Scam calls are aided in expanding their reach by telecom companies that are based across the U.S.
These telecom companies, often referred to as “gateway carriers”, are responsible for allowing nearly a billion calls into the U.S. phone system. These carriers intentionally ignore evidence of fraudulent behavior, such as high caller volume paired with short call times.
By ignoring these potential warning signs these companies facilitate calls that could be eliminated to reduce the number of fraudulent calls. Interfering to stop these calls would likely affect the company’s bottom line.
“They allowed at least hundreds of millions of scam calls into the US telephone system and they’ve earned a lot of money in the process,” said Gail Ennis, the Inspector General for the Social Security Administration, “In essence, profiting off of scam victims.”
Senators on both sides of the aisle expressed significant animosity towards the gateway carriers and the people that run them. Sen. Martha McSally (R-AZ) said that “there is a special place in hell for people who are scamming our veterans and our seniors”, while Ranking Member Bob Casey (D-PA) expressed his desire for “tracking these people down, prosecuting them, and throwing them in jail.”
Seeing tangible results in legal action against the people and companies who perpetrate the scams is not far off. In early January the Department of Justice, in conjunction with the Inspector General’s Office of SSA, brought a series of civil complaints against five companies and three individuals involved in the scams.
The cases, filed in the Eastern District of New York, are civil suits that aim to equitable relief from the companies and their owners. This relief includes injunctions, restraining orders, and possibly fines.
The primary goal of these suits is to penalize the companies that perpetrate these frauds against the American people. Beyond punishing and halt the fraudulent companies, these suits are also meant to “deter others from filling the void,” according to Ennis.
The desire to prevent new fraudulent companies from popping up comes from the long history of impersonation scams in the U.S. Prior to the dramatic rise of SSA scams, fraudsters had used the same playbook on another federal agency: the Internal Revenue Service.
The fact that fraud companies were able to so easily transfer from one agency to another is indicative of fraudsters ability to adapt in the face of adversity. This means that the efforts to combat them must not solely based on retribution, as Sen. Casey said, “because if we do that all day long then we won’t get to prevention.”
One of the key components of preventing these kinds of scams from occurring is educating on how to detect and report fraudulent calls. The SSA website home page features a prominent alert about the potential scams that links to a page with important information for customers.
The SSA also launched a new website dedicated entirely to reporting cases of fraudulent calls directly to the office of the inspector general. But one witness noted that this was just one small step in the larger battle against fraudsters.
Nora Dowd Eisenhower, the Executive Director of the Philadelphia Mayor’s Commission on Aging, said that broader education is necessary to help Americans prevent all types of scams, not just those impersonating Social Security.
“Today it’s social security, which is a terrible thing but next year it might be something else, and the following year something else again,” Eisenhower said, “So we need to have a mechanism in place to educate people about those scams as they are changing, faster than the fraudsters are changing them.”
Advanced Reporting Times, Spring 2020 