Field Work

October 13, 2022

It is a cruel farce. Scammers use the names of federal agencies charged with protecting citizens’ financial security to rip them off.

The Consumer Financial Protection Bureau (CFPB) has confirmed the existence of a new scam in which someone purporting to be from the agency contacts individuals and tells them they are eligible for a payout in a class-action lawsuit. On one condition: to collect the money, the scammer says the taxes owed must be paid upfront.

This is known as an imposter scam. Imposter scams involving other federal agencies – the IRS or the Social Security Administration – are common.

The CFPB imposter scam sounds vaguely credible since the story the victim is told is similar to the agency’s actual mission. The mission of the CFPB, established after the collapse of the subprime mortgage market, is to uncover chicanery by financial companies and get restitution to compensate victims for their losses.

The agency said the recently disclosed scam often targets older people, who are more vulnerable to falling victim if they are experiencing cognitive decline. “We can’t say it enough. The CFPB will NEVER call you to confirm that you have won a lottery, sweepstakes, class-action lawsuit, or about any other fees or taxes,” CFPB said.

A different imposter scam involving the agency occurred a few years ago. Someone used the name of a former top CFPB official to convince older victims they’d won a lottery or sweepstakes they had never entered.

“An imposter scam happens,” the official said, “when a criminal tricks you by claiming to be someone you trust.” …Learn More

Field Work

August 4, 2022

The old and the young are most susceptible to scammers using fake identities to extract money from their victims. People in their 50s who went to college are in the sweet spot and are much better at resisting them.

The question is how to prevent the vulnerable from falling prey to imposter scams, which account for a third of the dollars Americans report to the FTC they’ve lost in frauds every year. A new study finds that exposing people to a watered-down version of a scam they might see in the real world teaches them to recognize an actual scam that comes across the transom.

In the imposter scams that are the focus of this study, someone pretends to represent a trusted organization like the Social Security Administration, the Red Cross, or online retailer Amazon. The goal is to coax either money out of the victim or personal information that can be used to make money. Imposters arrive in many forms – phone calls, emails, or texts.

To educate the 1,000-plus people recruited to this study, the researchers assigned them to one of four different online training programs. The only training that worked was designed to effectively inoculate the participants against fraud by exposing them to simulated scams on an email platform.

After reading each email, they were asked to decide whether it was a fraudulent appeal under the guise of a trusted organization or a copy of a legitimate communication from the organization. To figure this out, they could inspect the source of the email or click on links.

One example of a legitimate Social Security email was “Need a replacement card?” One of the frauds that came from socialsecurity.org – the agency’s actual website is ssa.gov – asked the email’s recipient to “review your Social Security statement.” …Learn More

Research

July 5, 2022

COVID has created perils that go beyond just the threats to our health. Reports to the FTC of financial fraud and identity theft shot up 68 percent in the first two years of the pandemic – double the pace during the previous five years combined.

Older adults with fading memories and declining cognition have always been especially susceptible to fraud. But the pandemic, by forcing them into isolation, may have worsened their vulnerabilities.

That’s one takeaway from a new study showing that older Americans who report feeling lonely or suffering a loss of well-being are more susceptible to fraud. The study, based on pre-pandemic surveys of people over 65, is also highly relevant post-pandemic and indicates that interventions to reduce social isolation might be effective in blunting their vulnerability.

For retirees with “high life satisfaction and fulfilled social needs,” the researchers said, “fraudulent opportunities promising wealth, status or social connection may be less appealing.”

The analysis relied on the Rush Memory and Aging Project, which monitors retired Chicago-area residents for signs of cognitive decline and its aftereffects. The periodic surveys include questions such as “If a telemarketer calls me, I usually listen to what they have to say” and “If something sounds too good to be true, it usually is.”

The surveys also measure loneliness, asking participants to agree or disagree with statements like “I miss having a really close friend” or “I often feel abandoned.” Well-being was determined by whether the individuals had a sense of self-acceptance and purpose, autonomy, mastery of their surroundings, and personal growth. …Learn More