With the approach of the winter holidays, a new resource published by the Social Security Administration warns financial advisors and their clients to be on the watch for fraud and emerging scams.
According to the SSA's new report, How to Spot a Government Imposter Scam, attempts to defraud clients spike around the holidays. This year, the near-record Social Security cost-of-living increase of 8.7% seems to be a useful tool for scammers trying to make inroads with the unwary.
"Many of us spend the holidays relaxing and sharing in goodwill with friends and family," the SSA warns. "But some bad actors use the holidays to take advantage of people's generous spirits. Scammers frequently target the older and other more vulnerable members of our communities. They pretend they are from Social Security or another government agency to steal your money or personal information."
In late 2022, scammers are primarily using the telephone to contact clients, but scammers may also use email, text messages, social media or the U.S. mail. Increasingly, fraudsters are calling people to "verify information about the 2023 cost-of-living adjustment for people who get benefits."
As the SSA notes, the COLA is automatic, and a beneficiary does not need to verify anything, nor do they need to be collecting Social Security to benefit from the 2023 COLA. As such, the SSA won't ask clients to provide information or money to get their benefit increase.
