Social Security Administration Warns Beneficiaries About COLA Scam

A Social Security card sits alongside checks from the U.S. Treasury in Washington on Oct. 14, 2021. Kevin Dietsch/Getty Images

Scammers are targeting Americans receiving Social Security payments with a scheme related to the annual cost of living adjustments (COLA), according to the Social Security Administration (SSA).

The scammers are spreading false information that beneficiaries need to take certain actions to access the COLA increases, the SSA’s Office of the Inspector General (OIG) said in an Oct. 11 statement.

Annual COLA adjustments are “automatic, and beneficiaries do not need to take any action or provide additional information to receive the legitimate increase,” Hannibal Ware, acting inspector general for the Social Security Administration, said.

“Be wary of any communication that asks you to take extra steps or provide personal details for this increase, as it’s likely a scammer attempting to steal your identity or financial assets. Our office is dedicated to protecting the public and deterring these criminals from exploiting honest, hardworking people,” he said.

The SSA has already announced the COLA increase for 2025 at 2.5 percent, which it said will benefit more than 72 million Americans. Starting in January, retirement benefits are projected to rise by an average of about $50 per month.

Almost 68 million Social Security beneficiaries and nearly 7.5 million Supplemental Security Income receivers are set to benefit from this increase. In some cases, an individual may receive both of these benefits.

While the 2025 COLA is less than the 3.2 percent increase for 2024, it is largely in line with the 2.6 percent average of the past decade, according to the agency.

“This year, for the first time, Social Security beneficiaries will receive a newly designed and improved COLA notice that makes it easier for customers to find the information they need most,” the SSA stated.

“The simplified COLA notice is now only one page, uses plain and personalized language, and provides exact dates and dollar amounts of a person’s new benefit amount and any deductions.”

The SSA will begin to notify beneficiaries about the increase beginning in early December. Beneficiaries who have created a “my Social Security” account can view related information through their account.

Social Security Scams

The COLA scam is just one among the many that target Social Security beneficiaries. According to a July 17 post by advocacy group the National Council on Aging (NCOA), recipients could be targeted by impersonation scams.

A scammer may impersonate an SSA agent, contact a beneficiary, and ask them for a face-to-face meeting to make a cash payment. The fraudster could claim that the SSA overpaid them at some time and that they should now pay back that overpayment.

“This is an especially dangerous scam, since it can put you in physical danger. In reality, SSA agents will never ask you to meet them in person to hand off cash,” the NCOA stated.

Some fraudsters lie to the beneficiary, telling them that their Social Security benefits will be suspended and asking for payments to resolve the issue. They sometimes threaten the target with arrest if they do not comply with the instructions.

The U.S. Senate has passed a resolution that declared March 7 as National Slam the Scam Day. The annual observation will be jointly led by the SSA and the SSA’s OIG. The OIG noted that consumer awareness is the “most effective method” to counter Social Security scams, according to a March 11 statement.

It cited data from the Federal Trade Commission to claim that Social Security-related scams are the “number one government imposter scam” in the country. Last year, more than $126.5 million was lost by citizens to such scams, according to the OIG.

“The U.S. Senate resolution strengthens the message to every American to stay alert and hang up the phone or ignore the suspicious messages from these criminals so we disrupt scams,” said Gail S. Ennis, inspector general for the SSA.

According to the nonprofit Better Business Bureau (BBB), there are some red flags that suggest that the person posing as an SSA agent could be fraudulent.

The agency primarily contacts people through the mail, according to the BBB, which said the SSA usually calls people only when a person has requested them to do so. As such, a call, text, or email from anyone claiming to be an SSA agent is typically a red flag, the nonprofit said.

The SSA never threatens individuals with arrest or legal action, nor does it suspend Social Security numbers or demand payments, according to the BBB.