WASHINGTON, D.C. —- Scam callers impersonating the Social Security Administration have caused $38 million in reported losses to Americans in 2019 alone, according to the Federal Trade Commission.
The Senate Special Committee on Aging’s 2020 Fraud Book, released today, says that seniors in particular are vulnerable to this scam due to increased rates of isolation.
“The latest statistic shows that seniors are losing close to $3 billion per year to pernicious scams,” said Senator Susan Collins (R-ME), “and I think that’s the tip of the iceberg because many seniors who have been affected by this scam are either too embarrassed to report their loss or don’t even know who to turn to.”
Reports of the Social Security scam call have skyrocketed in the past few years. As recently as 2017, the scam barely registered on the Senate Special Committee on Aging’s list of the top reported scams. Last year, it jumped to number one.
Ranking Member Bob Casey (D-PA) played a recording of the scam phone call that a member of his staff received last week. The message, which displayed the real SSA in the caller identification, said assets in the staffer’s name and social security number had been involved in a crime, and that their social security number would be suspended. If they do not receive a call back, the message said, the SSA would pursue legal action.
“No one from our government will ever make these types of threats,” said Casey.
These threats, said scam call victim Machel Anderson, were enough to make her follow the directions of the scammers without questioning their identity.
“In hindsight, I realize there were many signs that I should have recognized indicating that I was being scammed,” said Anderson. “But the scammers had me so worked up. They told me that I had to be convincing or that I would end up getting arrested. They even sent me fake arrest warrants.” Anderson had over $154,000 stolen.
Both the Social Security Administration and law enforcement agencies have had a difficult time combatting the scams and prosecuting those involved. Collins cited initial hesitation to intervene from the Social Security Administration, as well as difficulty gathering real-time data and tracking calls.
“At first we were not doing enough to combat these scams,” said Andrew Saul, Commissioner of the Social Security Administration. “That was shortsighted. The magnitude of this problem caught us off guard.”
Gail Ennis, Inspector General of the SSA, said that companies known as gateway carriers make these calls particularly difficult to combat. Gateway carriers make money by connecting millions of robocalls every day from foreign call centers to the personal phones of people in the United States.
“The problem is with the gateway carriers, which frankly can operate out of your garage. They don’t need a lot of infrastructure, they don’t need a lot of people,” Said Ennis. “You can set up a few servers in your garage and be up and running and help transmit millions and millions of calls and introduce those calls from foreign call centers into the United States telecom system.”
Ennis said federal authorities filed lawsuits and requests for injunctions yesterday against five telecommunication companies that help scammers route calls to U.S. cell phones.
Witnesses also testified as to how the scam calls were affecting operations of the SSA.
“The increased call volumes prevent our agency from being able to conduct legitimate business with those seeking our core services,” said Justin Groshon, Social Security field office manager and representative of the National Council of Social Security Management Association.
Feedback from field office managers states that employees conducting legitimate social security business have been met with suspicion, leading to repeated telephone calls and office visits, and delays in processing claims and other post-entitlement work, said Groshon.
According to a survey conducted for the Social Security Administration, over 97 percent of Social Security offices had received reports from the public about callers impersonating a social security employee. Of those, almost 70 percent reported that this was a daily occurrence, with 50 percent reporting as many as 15 of those calls per day. In some instances, this has increased call volumes to Social Security field offices between 400 and 1000 percent.
Witnesses from the Social Security Administration testified to the committee on their efforts to combat the scam phone calls, citing education and public outreach campaigns as the most effective strategy.
The Social Security Administration has set up an online form to report these calls, allowing them to gather data on the scam in real time. In addition, Saul said that the Social Security Administration and has partnered with major telecom companies to identify, block, and report suspicious activity. The Social Security Administration has created a major case unit within the SSA Office of the Inspector General to better coordinate efforts with state and federal enforcement partners to pursue legal action against those making the calls.
Saul also pointed to a new partnership with financial institutions that will allow an institution to verify the identity of anyone applying for credit using their social security number. Further intervention at the bank, Anderson said, could have stopped her from losing her money.
Many of the witnesses agreed that the best strategy to reduce victims of the scam is to develop educational interventions for seniors to prevent both present and future scams.
“At the end of the day it’s still about educating and public awareness,” said Ennis, “because as I’ve said, these scammers are very creative and the minute we plug one hole, frankly, they will find another one.”
Nora Dowd Eisenhower, Executive Director of the Mayers Commission on Aging in Philadelphia, said that similar federally funded education programs are already in place, citing the Senior Medicare Fraud Patrols that are currently conducted in every state to get Medicare beneficiaries to scrutinize their medical bills. According to the Office of the Inspector General, expected recoveries to Medicare attributable to the project from 1997 through 2018 were over $100 million.
Eisenhower said that this model could be replicated with a focus on Social Security scams.
“The scam today is Social Security, which is a terrible thing, but next year it might be something else, and the following year something else again,” said Eisenhower. “We need to have a mechanism in place to educate people about those scams as they are changing, faster than the fraudsters can change them.”
“Combating these scams is going to take a coordinated, all-hands-on-deck effort and that’s what we’re committed to doing,” said Collins.
Advanced Reporting Times, Spring 2020 