FTC Testifies on Phone Scams Against Seniors

Maureen Mahoney
Public Policy Fellow

Friday, July 1st, 2016

Elder financial abuse continues to be major problem in the United States – it’s estimated to cost older Americans $3 billion a year. And, it’s on the rise. According to the Federal Trade Commission (FTC), complaints from seniors about fraud increased about 47 percent from 2012 and 2014.

Lois Greisman, Associate Director of the Division of Marketing Practices at the Federal Trade Commission (FTC), testified at a Senate hearing on elder financial exploitation and highlighted its connection to phone scams. Two of the most common phone scams they hear about, Greisman noted, were imposter scams and tech support scams.

Government imposter scams were responsible for over 35 percent of the complaints that the FTC received from seniors through their Consumer Sentinel network in the first half of 2016. At Consumers Union, we frequently receive complaints about an imposter scam called the IRS scam. That’s when a scammer calls – often “spoofing” their number so that a Washington, DC area code appears on the caller ID – and pretends to be from the IRS, claiming that you will be arrested or sued if you don’t immediately pay a fictional tax bill.

Rashid, from Rowland Heights, CA describes the scam in more detail. Though he did not fall victim to the scam, his story highlights how scary – and time-consuming – it can be to deal with these scams.

A guy named Kevin Anderson left the voicemail in my home telephone message system claiming that he is an IRS authorized Fraud Investigator. He threatened that if I do not call back he will start a criminal lawsuit against me. . . . I called him around 9 am and he answered the phone. After I gave him my phone number he recognized me and he introduced me as an IRS authorized Tax Fraud Investigator. He was telling that I have done fraud in my income tax return and I owe lots of money to IRS. If I have not a criminal attorney then I should hire one or I can settle with him. I told him that I have done nothing wrong in my tax return and why IRS did not send me any letter regarding this issue. I told him that I would call him you back after one hour. Immediately I called the IRS identity theft hot-line and find out that IRS has no claim against me and they never authorized any private investigator to collect tax. I spoke with [an agent] and he took the incident report and will forward to higher authority for investigation.

About 9 percent of the complaints they received from seniors in this same time period were about tech support scams. In these scams, the consumer receives a message over the phone or computer from a scammer, who claims that they’ve detected a virus or other computer problem. The caller may direct the consumer to hand over control of the computer, or request financial information.

Too many of these scams affect consumers of all ages, including seniors. If you get a suspicious call, just hang up! Click here for more information about protecting yourself from phone scams.

One of the best ways to protect yourself from phone scams is to not receive them in the first place! Take a look at Consumer Reports’ review of robocall-blocking devices and services, so that you can learn more about the tools currently on the market to stop robocalls. And please help us call on the phone companies to offer free, effective tools to all of their customers to stop unwanted robocalls.

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