Protecting your retirement savings from the latest scams

New scams keep popping up. Here’s how to shut them down.

Have you ever received a call from someone claiming to be from your bank asking for verification of your account, but the caller wouldn’t clearly state why that information was needed? Or have you received an email riddled with grammatical errors claiming to be from a streaming service offering you a free subscription if you just “click the link” to get it?
 
Phishing attacks—scams in which criminals use false pretenses to obtain sensitive information, such as passwords, account numbers or login credentials—are often perpetrated under the guise of well-known businesses. Other scams are more direct. Impersonating a trustworthy individual to solicit money remains a common trick. People with substantial assets, including retirees, are often the targets of these efforts.
 
With care and knowledge, however, you can avoid these types of fraud. In fact, now’s a good time to brush up on your scam-sensing skills. As we move toward the end of 2020, we’re about to enter what has traditionally been peak scam season. Phishing attacks are known to increase by up to 50% during holiday shopping season,1 and the coronavirus pandemic has created even more opportunities for scammers.
 
The good news is that traditional fraud-prevention wisdom still applies. Let’s look at how scam artists are attempting to obtain personal information—and at ways you can avoid giving them yours.
 

Coronavirus pandemic scams

 
Criminals are attempting to take advantage of current events by operating scams related to the coronavirus pandemic, which include selling access to vaccines, treatments or at-home test kits—none of which actually exist. Others are sending emails using names and logos of trusted sources like the World Health Organization to get people to download safety information—but only after they enter their email login credentials. Rather than reacting to a request or offer you haven’t solicited, search for the same information on the organization’s actual website.
 
Scams are also rampant on social media. You might see a Facebook message that appears to be from a trusted friend, sharing a “government” offer to provide older adults with grant money in exchange for staying home to help stop the spread of the virus, and the offer may include a link to click to learn more. As usual, you’ll want to avoid clicking on anything from an unverified source. Online sources such as snopes.com often have fact-checking pages devoted to helping people understand which of these sources are legitimate, and which are scams.
 
Some retirees have even been receiving fake Medicare phone calls asking for personal info. A “Medicare representative,” for example, might promise at-home testing—but to get it, you have to share your Social Security or Medicare number. Some of these types of calls can be very convincing, so if you’re unsure of their authenticity, you can always hang up and call the agency in question directly at its publicly listed number.

Who is most affected by coronavirus-related scams?

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Online shopping scams

 
When shopping online in the coming months—whether you’re buying holiday gifts or renewing your supply of face masks and hand sanitizer—always pay with a credit card and make sure you’re purchasing on secure websites. Although scammers can create sophisticated websites that are difficult to detect as fraudulent, there are ways to help you spot them. When you’re on a site, always look for the image of a padlock to the left of the URL at the top of your browser—if that lock icon is not there, chances are the site is not secure, and you’ll be taking a risk by entering your credit card info there. You can also use a website safety-check tool like Google Safe Browsing to verify a site .
 

Retirement Income Scams

 
Older Americans with sizeable investments and Social Security income are attractive targets for scammers. Luckily, statistics show that people ages 60 and older are setting a good example by being twice as likely as those between the ages of 20 and 59 to spot and report fraud before losing money to it.2 However, when those older than 60 do lose money to a scam, their reported financial losses tend to be higher than the losses experienced by younger victims,2 so it’s important to be aware of scams that attempt to tap into the income streams of retirees.
 
In one common scam, an official-sounding person claiming to be a Social Security employee calls a retiree to alert them that their Social Security number has been suspended due to criminal activity. Once hooked, the victim is asked to provide information about the bank account where their benefits are deposited in order to reactivate their Social Security payments. 
 
It’s also important to be cautious toward unsolicited investment “opportunities.” Be especially wary if someone you don’t know recommends foreign or “offshore” investments. If you send your money abroad and something goes wrong, it’s more difficult to find out what happened and to locate your money. Sometimes retirees are also sent emails prompting them to download research reports about investment opportunities. Be careful—you may actually download malware instead. Scammers use malware to infect computers in ways that allow them to remotely access victims’ personal info.
 
To help avoid investment scams, always be sure to research companies that you’re unfamiliar with. You can also check the U.S. Securities and Exchange Commission Investor Alerts and Bulletins Page —which includes notifications about pandemic-related scams and a list of companies that have been issued trading suspensions. If you’re still unsure, consider consulting with your financial professional.

The median amount of money lost to fraud increases as retirees age

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Charitable giving scams

 
When it comes to charitable giving, the pandemic and recent social movements are bringing out Americans’ desire to support important causes. But as the end of the tax year approaches, and you make your final contributions of 2020, remember to do your research before you give. If you’re emailed or texted by a charitable organization asking for a donation through their website, use a site like Charity Navigator , GuideStar or CharityWatch to cross-check the name of the organization against how the name is listed on one of those sites. Scammers often choose a name very close to that of a legitimate charity.
 
It may also be a good idea to ignore any solicitations you receive that pressure you to donate using cash, wire transfer, gift cards or cryptocurrency—ways that con artists often like to receive money. And try to avoid providing payment info for donations requested over the phone unless you’re sure of who has called you. Instead, consider directly dialing the number listed on the organization’s website.
 
You may not be able to fully control how many or what kind of fraudulent communications come your way but remembering the following key actions can help you prepare for them.
 

Quick tips for avoiding scams

  • Keep them guessing. Your passwords and usernames should be changed regularly (ideally a different password for every site). And don’t use family names or publicly available information about yourself in your password (i.e., don’t make it your maiden name). Consider a trusted password management tool (many are free) to help you create—and remember—stronger ones.
  • Stay up to date. Make sure you update your computer and phone software and operating systems as often as recommended.
  • Slow down. Don’t let anyone rush or pressure you into making a decision or taking action.
  • Think like an editor. Does the message you’ve received have misspelled words, grammatical errors, odd capitalizations, or other things that seem “off” for authoritative or professional contexts?
  • Go to the source. Hover your mouse cursor over displayed links or email addresses to see the actual sources behind them. Better yet, confirm what you’re being told by entering it in your browser and going directly to the supposed source’s actual website, or by performing an internet search for it.
  • Don’t give to get. Anyone who asks you to pay money to get more money is usually a scammer. For example, the IRS will never contact you to ask for your Social Security number or banking information in order to release a check to you.
  • Make transactions traceable. Use a credit card rather than a debit card, cash or wire transfer whenever possible.
1 “2019 Phishing and Fraud Report,” f5.com, 2019
2 “Scams and Older Consumers: Looking at the Data,” consumerftc.gov, 2019
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