Social Security watchdog warns of fake 'activation fee' scams after 2027 COLA
The Social Security Administration's inspector general's office expects scammers to exploit the 2027 cost-of-living increase. Its advice is to pause and talk it over with someone you trust.
In short
- What happened?
- According to AOL, the Social Security Administration's inspector general's office warned that scammers may exploit the 3.6% 2027 cost-of-living increase, for example by demanding a fee to "activate" it.
- What was the warning sign?
- Unexpected contact that pressures you to act, asks for payment by gift card, cryptocurrency or wire transfer, or demands a fee for a payment increase that is automatic.
- What can you do?
- Pause, do not use the contact details in the message, and talk it over with someone you trust. The OIG says the COLA is automatic and needs no payment.
What happened
According to AOL, which carried a report first written for Yahoo, the Office of the Inspector General (OIG) at the Social Security Administration is warning that scammers may try to profit from the newly announced 2027 cost-of-living adjustment (COLA). The report says the increase is 3.6% and that it gives scammers an opportunity to target people who receive Social Security and Supplemental Security Income.
The OIG said it is preparing for reports of people being asked for $100 or personal details to "activate" the increase. The COLA is automatic and needs no action from recipients.
The watchdog described four main types of scam. In the first, callers pose as officials and demand a fee. In the second, texts, emails, social media messages or letters send people to websites that closely resemble the official one. In the third, a message about a suspicious purchase leads to a phone call and then to someone posing as a government official or police officer. In the fourth, callers threaten arrest or the loss of a Social Security number, or claim a relative needs bail money, and ask for payment by gift card, cryptocurrency, wire transfer or cash.
The OIG also said that checking for spelling or grammar mistakes is becoming less reliable, because fraudsters can use AI to produce convincing messages and websites.
Warning signs
- An unexpected call, text, message, email or letter that warns of a problem or offers a prize.
- Pressure, such as threats, demands or limited-time offers.
- Requests for payment by cash, gift cards, gold bars, prepaid cards, wire transfer or cryptocurrency.
- A claim that an officer will collect payment in person.
- An offer to protect your savings by moving them to a "secure" account.
- A request for your Social Security number, or a threat to suspend it.
- A demand for secrecy.
What families can do
- Remember that, according to the report, the COLA is automatic: no fee or action is needed to receive it.
- Pause when unexpected contact arrives. The OIG advises talking it over with someone you trust.
- Do not use a number or link given in the message. Look up the organisation's contact details yourself and call back.
- Agree a family habit of mentioning any call about money, arrest or a relative in trouble before acting.
- If you have been targeted or have paid, report it to the relevant authorities and your bank.
Our call-protection app, QuietGuard, is built so that only people you have named as trusted can ring, and other calls stay quiet and are listed in Activity, which can give you time to think before calling anyone back. It does not stop text messages, emails or fake websites, and it is no substitute for talking to family or contacting your bank or the police.
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