Not actually from the government. (Photo: Shutterstock)

What's the biggest fraud facing seniors today? A scam in which callers attempt to trick them into giving them money or handing over their Social Security numbers.

Senators said Wednesday that Americans reported losing close to $38 million last year to this Social Security scam, which they said is a relatively new scheme targeting seniors that has grown at an alarming rate.

Sens. Susan Collins, R-Maine, and Bob Casey, D-Pa., chairman and ranking member of the Senate Aging Committee, stated at the Wednesday hearing, titled "That's Not the Government Calling: Protecting Seniors from the Social Security Impersonation Scam," that the Social Security Scam has become the most-reported fraud to the Federal Trade Commission and the Aging Committee's Fraud Hotline.

The Social Security Administration launched a new public service announcement campaign on Jan. 21 to warn people about the ongoing nationwide telephone impersonation scheme.

The scammers mislead victims into making cash or gift card payments for help with purported identity theft, or to avoid arrest for bogus Social Security number problems, according to SSA.

"To be clear, the scams we are discussing today are not Social Security program fraud," Social Security Commissioner Andrew Saul told the committee in his testimony last month. "Rather, they are schemes to trick people into thinking a credible organization — a bank, a utility company, a credit card company or the government, including SSA — is calling so that they give up their personal information, pay money or both."

Said Saul: "There are many variations. Scammers play on emotions like fear to get people to act without thinking."

For example, a caller may say he is from SSA and that a senior's Social Security number is suspended or has been used in a crime.

"The caller identification may be spoofed to appear to originate from a government number. The caller may ask you to provide information like your SSN to reactivate it," Saul said. "The caller may tell you your bank account will be seized and direct you to send money or gift cards for safekeeping. If you comply, your money is gone. If you don't comply, the caller may threaten you with arrest."

Since creating an online reporting form less than three months ago, the Social Security Administration has received more than 115,000 complaints. The form can be accessed at oig.ssa.gov.

A new version of this scam is also emerging, Saul reported, in which fraudsters email fake documents in attempts to get people to comply with their demands. "Victims have received emails with attached letters and reports that appear to be from Social Security or the OIG," he said. "The letters may use official letterhead and government jargon to convince victims they are legitimate; they may also contain misspellings and grammar mistakes."

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