The IRS agent calling you on the phone isn't really from the government, and the person collecting disaster relief funds may actually be lining his own pockets. Phone scams are common, and they often prey on people's generosity or fear. Nearly 1 in 6 Americans have lost money to a phone scam in the last 12 months, according to the 2019 U.S. Spam and Scam Report from the phone app Truecaller.
"They are really, really good at it," says Patrick Simasko, an elder law attorney and wealth preservationist with legal firm Simasko Law in Mount Clemens, Michigan. Scam artists have perfected their pitch and use spoofed numbers to make calls look legitimate on caller ID. However, you'll know it's a scam if the person on the other end of the phone demands payments via gift cards or wire transfers. Requests for sensitive information such as Social Security numbers, birthdates and passwords should also be red flags.
Email fraud red flags
While crooks use many scenarios, here are 10 common phone scams currently making the rounds.
- Threatening calls from the IRS
- Technical support calls
- Fake charity appeals
- Lottery scams
- Family members in peril
- Bank fraud calls
- Insurance, health care and debt scams
- Website password requests
- Fake customer requests
- Other urgent requests
Trevor Buxton, security communications manager for PNC Bank, recommends people avoid engaging with scammers. "Your best defense against these types of calls is just to ignore them," he says. While some people like to waste a scammer's time by stringing along the conversation, Buxton says that may not be wise. Some scams use voice-recording software, and the more you talk, the more likely you'll say something that the crooks can use to make unauthorized transactions in your name. It's best to hang up immediately.
While anyone can be susceptible to falling for a scam, seniors could be more trusting on the phone. "Everyone should have a conversation with an older loved one," says Kevin Witt, chief technology officer for investment firm Kestra Financial in Austin, Texas. Before you sit down with them, though, familiarize yourself with these common phone scams.
Threatening calls from the IRS
Especially popular during tax season, IRS phone scams involve crooks impersonating federal agents. They sound official and may even provide a badge number. If immediate payment isn't made, they threaten lawsuits or may say the police are on the way to make an arrest.
"First of all, the IRS will not call you by phone," Buxton says. "That's a pretty sure sign it's a scam." What's more, they typically ask for payment in the form of gift cards, something the IRS would never do. The IRS almost always makes its first contact via the mail, and it will never demand payment over the phone. Fraudsters like gift cards because they are untraceable, but they are a dead giveaway that a call is not legitimate.
Technical support calls
In this scam, the caller typically says they are from a well-known company like Microsoft or Apple and have detected an error on a person's computer. They will then talk the victim through a series of steps to "fix" the problem. In reality, a person is unwittingly downloading software that will hijack their system or give the caller remote access. Scammers use it to gather sensitive data or install ransomware, which requires a payment to unlock a computer's files.
"It's ripe for elder abuse because they lack the technical sophistication," Witt says. Younger people might recognize something fishy about Microsoft calling them, but seniors could be more trusting. As with the IRS scenario, these calls are always fake. Microsoft and other tech companies do not make unsolicited technical support calls.
Fake charity appeals
Charity scams are common after a natural disaster or other tragedy. "The crooks count on the goodwill of people who want to help," Buxton says. To avoid giving money to a criminal, don't make any donations to unsolicited callers. Instead, do your own research using sites like Charity Navigator or Guidestar to select a reputable charitable organization.
If you get a call saying you have been randomly selected to win a foreign lottery, don't believe it. These calls are fake, and the tipoff is that the caller will say you need to pay taxes or other government fees in order to collect the winnings. "Why am I paying for something I have won?" Buxton says. "That should be a red flag right away."
Family members in peril
These scams often target seniors, Simasko says. Someone calls to tell grandma they are in trouble. Maybe they are in jail and need bail money or their car has broken down. "Of course, she can't quite hear right," Simasko says, so she assumes it is, in fact, one of her grandchildren and is quick to provide payment over the phone.
If you get a call that is supposedly a family member in a crisis, hang up and call that person's number directly. If you are unable to reach them, call another friend or family member who may be able to validate their whereabouts. Try the courthouse or police department if a person is allegedly in legal trouble. Most importantly, impress upon senior family members that they should be skeptical of unusual calls from family members asking for money.
Bank fraud calls
Sometimes crooks will pretend to be the good guys. They may call and say they are alerting a customer to potential fraud in their bank account. As the call progresses, they request bank account numbers, passwords or other sensitive data. Don't provide these details to anyone calling you. Hang up instead.
Then, contact your institution directly to confirm whether the call was legitimate. Don't use a number provided over the phone or in a voicemail from an unknown person either. Use the number for your local branch. "I call my bank back on a number I know is legitimate," Buxton says.
Insurance, health care and debt scams
A number of very similar phone scams involve fraudsters trying to sell auto warranties, offer debt consolidation loans or confirm health insurance information. It's best not to buying anything over the phone unless you have initiated the call. Also, be aware that debt consolidation offers and people posing as health insurance representatives may be fishing for information that can be used for identity theft.
As with the IRS, "Medicare isn't going to call you," Simasko says. If someone claims to be calling about your health coverage, the safest course of action is to hang up and call back the number on your insurance card.
Website password requests
Scammers may be after access to your online accounts. They call under a number of pretenses, such as providing technical support or to follow up on suspected fraud, and then ask for your password to verify your identity. "You never should be asked to disclose a website password over the phone," Witt says. "There is no legitimate reason for that."
Fake customer requests
It isn't just individuals who receive scam phone calls. This can be a problem for small businesses too. Every company should educate its employees on potential scams and proper safeguards. "They should think of their jobs as standing on a watchtower," Witt says.
At his firm, Witt says scammers will call posing as customers. They typically have some sort of emergency that needs to be addressed immediately. "The bottom line is that they need money wired somewhere," he says. Employees need to be trained to confirm a person's identity in these situations. Ideally, that will involve connecting with customers through two channels, such as phone and email, to verify they did, in fact, call the office.
Other urgent requests
Phone scams are constantly evolving, but they have a common thread. "Almost all the scenarios that have crossed my desk have a sense of urgency," Witt says. Scammers are insistent that whatever they are calling about needs to be addressed immediately or the opportunity will be lost. If anyone is pushing you to make a quick payment or decision over the phone, step back and re-evaluate whether what they are saying makes sense.
Should you find yourself the victim of a phone scam, it can be difficult to recover money. However, you should still file a police report and contact your bank. What's more, if your Social Security number has been compromised, contact the three credit-reporting bureaus of Experian, Equifax and TransUnion to request fraud protections be placed on your credit reports.
|For more news you can use to help guide your financial life, visit our Insights page.|