It’s enough to cope with stock market gyrations and other variations of personal finance without having to do battle with a scammer bent on draining your bank account. Forewarned is forearmed, as the saying goes. What you don’t want to hear yourself saying is, “Wow, I didn’t see that coming.”
It may seem odd, but the fact that many common scams have a long shelf-life is a good thing. That makes it possible for organizations to track scams and warn the public about what to watch for. There are many agencies doing this, including the Federal Trade Commission (FTC) and the Better Business Bureau (BBB). The FTC regularly updates the part of its website that’s dedicated to exposing scams and provides a way for consumers to post complaints. The BBB also keeps track of current scams and schemes to keep consumers and businesses on their toes.
One key item scammers seek is your Social Security number (SSN). By now, we all know it’s critical to guard this key piece of information. Yet, one method scammers often use to steal SSNs is to simply phone victims. It goes something like this: You get a call from someone claiming to be from the Social Security Administration, and the caller tells you that your SSN has been “suspended” due to suspicious activity. The story varies, for example, the caller may say that you’re due for an increase in future benefits. Then he or she will ask you to verify your SSN, just to be sure you really are the person who owns the account. And that’s how they get your number.
No matter what a caller tells you, the Social Security Administration states that it never places such calls. The same is true for the IRS. Don’t be fooled by caller ID, which can be part of the scam. Thieves can mimic actual phone numbers, even for government agencies.
What should you do if you get such a call? Hang up and call the number yourself. Or, if you want to be sure everything’s in order, end the call. Then look up the general phone number on your own, call it and ask if someone is trying to reach you. (For the Social Security Administration, the general office number is (800)-772-1213. Don’t rely on a phone number that the caller gives you. That number is most likely part of the scam.
How Thieves Use Stolen SSNs
Once a thief gets hold of your SSN he or she might seek to deepen the scam using one of the following tactics:
Fund wiring request. A scammer may call you, pretending to be with an organization that you’d expect to already have your SSN. As noted before, this could include the Social Security Administration, the IRS, or an official from your bank or credit card, or others. Once the caller convinces you that the call is legitimate, he or she may recite to you your own SSN, to further establish credibility. Then the caller may ask you to authorize a funds transfer for a specific purpose, such as to prevent having your account frozen. Don’t fall for it.
Tax identity theft. This seasonal scam involves intercepting a tax refund that should go to you. The early tip-off for you could be a letter from the IRS stating that the tax return you have just submitted is the second one it has received using your SSN. If you e-file your return, you may get a notice that your filing was rejected because your refund has already been paid. Or the IRS says it’s not giving you a refund due to taxes you didn’t know you were supposed to pay (which could indicate that someone was fraudulently using your SSN to work under, but not paying the related taxes).
Another Common Scam: the Fake Charity
Many Americans are charitably inclined, a fact which thieves may use against you. Bogus charities pop up like mushrooms after a disaster such as a hurricane, earthquake or devastating forest fire. A charity with an unfamiliar name isn’t necessarily a sign that it’s fake, and a name that does sound familiar isn’t necessarily a legitimate charity.
Scammers often piggyback on established charities with names that are close enough to fool casual observers. Give special attention to the spelling. Suppose you get a plea for donations from a group called United Ways. The actual charity is United Way. Thieves are counting on you to not notice the slight difference. So, outsmart them by taking a moment to check in one or more of the ways noted above.
Before you donate, check charity rating groups such as Charity Navigator and the Wise Giving Alliance. You can also run an Internet search on your own by pairing the charity’s name with words like “complaint” or “scam.”
More Fakes: Bogus Ads and Not-So-Sweet Sweethearts
Here’s a common Internet-based scam that’s catching on: Fake ads. You’ll be intrigued by an offer for heavily discounted “name brand” goods, and make an online purchase. The problem is, the site is just a collection point for credit card information that will be used by scammers to test the credit limit on your card. Steer clear of that one by using a secure Internet connection and checking the website’s URL to make sure that it begins with https:// as opposed to http://. The “s” stands for “secure” and indicates that information transferred on that site is encrypted and therefore less vulnerable to theft.
Too Hot to Be True
Falling victim to retail fraud might not be quite as emotionally distressing as another kind that’s claiming many victims today: The “romance scam.” According to the BBB, while social media has made meeting new people and dating easier, “it has made the scammer’s work simpler, too.” There’s even a term for it: “catfishing,” a play on the general purpose online “phishing” ploy.
The basic formula is that a scammer creates a fake identity, then tricks you into building up a friendship with this phantom. To explain why you can’t simply call the individual or meet in person, the scammer may claim to be in the military, living overseas. Next thing you know, you have surrendered enough personal information to be fleeced. In many cases, the scammer claims to be widowed and have a young child, to make them more sympathetic. Once you’re hooked in, your “sweetheart” will most likely begin asking for money. It’s “just a loan,” but probably the first of many such “loans.” As the BBB warns, if it’s “too hot to be true,” cut off all contact.
It would take millions of words to catalog all the common scams that are out there. Don’t assume that you’ll only be targeted if you spend a lot of time online. Some scams and schemes are low-tech and arrive at your home with a simple knock on your door or a ring of your phone. Even so, experts in the security industry say the biggest trap to avoid may be fear and paranoia. Be wary, but don’t assume everyone is out to get you. Keep your skepticism healthy.
Grossman St. Amour CPAs PLLC has been in business for over 60 years. As a certified public accounting firm located in central New York, Grossman St. Amour CPAs provides businesses and individuals with accounting, audit, taxation, business planning and valuation, financial planning, investment consulting, and fraud examination and deterrence services. For more information about how Grossman St. Amour CPAs PLLC can be of service to you, contact our professionals online or call 315.424.1120.
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