UM21-Q1: Mixed-methods Analysis of Consumer Fraud Reports of the Social Security Imposter Scam

Researchers

Abstract

In 2019 the Federal Trade Commission (FTC) received more than 166,000 consumer fraud reports about Social Security imposter scams.1 Reported losses from April 2018 to May 2019 were $19 million, overtaking the highest annual period of losses reported for the IRS imposter scam at $17 million (Figure 1).2 Though more than 95% of consumers who filed a report did not comply with the scam, those who did lost a median of $1,500 per incident. As the majority of scams are never reported, these numbers represent just the tip of the iceberg of Americans who have been victimized by Social Security imposter scams. The value of Social Security information and the perceived authority of the Social Security Administration is well known to fraud perpetrators. These scams typically involve robocalls in which callers convince the target that their Social Security information was compromised or suspended because of suspicious activity, or that their Social Security number was used in a crime. Perpetrators often ask targets to confirm their Social Security numbers and tell them to purchase gift cards to supposedly safeguard funds in compromised bank accounts. Despite the growing prevalence of Social Security imposter scams, there has been no academic research on this subtype of fraud. One problem is that general sample surveys do not ask respondents about the individual subtypes of government imposter scams they may have experienced, thereby conflating the prevalence of Social Security scams with the IRS scam and others. For fraud victim research in general, a core limitation is that many individuals deny victimization and others simply do not know they were deceived. Due to a lack of empirical research on this problem, important questions about Social Security scams remain unanswered, such as who complies, how criminals change their story over time, and what persuasion tactics are most common and effective at eliciting compliance. In-depth research is needed to resolve significant gaps in knowledge to inform effective consumer education campaigns and other fraud prevention efforts. This project will yield insights directly relevant to SSA, such as what age groups are most susceptible, the manipulation tactics the imposters use to deceive targets, the reasons victims provide to explain why they complied, the possible effectiveness of consumer fraud awareness messaging and law enforcement actions, and other actionable findings.

Project Year

2021