If you’re over 50, you are likely to fall victim to a scam. With new technologies being developed all of the time (and a wealth of new opportunities for scammers), those of us born prior to the technical revolution find oursevles especially vulnerable. Therefore, I am running a 3-part series written by Ismat Mangla for the Experian blog, “My Relatives Fell For This New Scam: Be On the Lookout!”
I recently learned about a nasty new scam making the rounds while visiting older relatives in Michigan during the holidays.
Last October, my family members received a phone call from a company dubbed Utility Savings Expert, whose website (utilitysavingsexpert.net) features the tagline We are here to help you, but omits the second half of the sentence: separate you from your money.
The pitch was enticing: Utility Savings Expert claimed they could help customers save up to 50% on various bills, including cell phone, cable, electric, and more. All you had to do was share your account information in order for them to pay the bill on your behalf. Once you checked to make sure the bill was covered, you simply wired the company half the full amount due. Voila! Instant savings.
The offer was so tempting that my family members, who are retired and live on a fixed income, decided to try it with their Sprint phone bill. They gave the scammers their Sprint account information, and a few days later, sure enough, their $250 bill had been paid in full. Satisfied, they agreed to send half the amount to the Utility Savings Expert company. The catch? They could only send payment via wire transfer, not check or credit card.
That should have been a glaring red flag, says Brandy Bauer of the National Council on Aging. “Legitimate companies won’t require you to pay only by wire transfer or reloadable debit card,” she says.
It wasn’t until about a month and a half after they wired the money that they noticed something wrong. Sprint was charging them an additional $250 because a payment made on their account weeks ago had been reversed.
Here’s what most likely happened: the scammers called the issuer of the credit card they used to make the payment and alleged that it was a fraudulent charge—so the bank reversed the charge. Of course, the victims were out both the money they wired and still had to pay their Sprint bill.
New Twist on a Familiar Scam
Phone scams targeting older Americans are certainly not new. In fact, a 2015 study by True Link Financial estimates that seniors lose more than $36 billion each year to various kinds of financial abuse, including scams that prey on victims by luring them to send money over the phone. And that’s just the ones that are known: the Consumer Financial Protection Bureau estimates that only 1 in 44 financial crimes against elders are actually reported.
What is new, however, is the way fraudsters lure their targets. Criminals continually invent new ways to entrap unsuspecting Americans—very often seniors—into giving out personal information or money over the phone.
“There is always a new variation of a phone scam,” says Nicole K. Parshall, a staff attorney who specializes in consumer protection at the Center for Elder Law and Justice in Buffalo. “Scammers are very good at developing new tactics in order to engage with specific types of individuals.”
Check back tomorrow for the second part of this 3-part series!
Ismat Sarah Mangla is a veteran journalist with a background in writing about money and religion, though not necessarily at the same time. She previously served as the religion reporter for International Business Times and spent several years as a staff writer at Time Inc.’s Money magazine, where her work earned a Gerald Loeb Award, a SABEW Best in Business Award, and a Henry Luce prize, among others. Her writing has appeared in Time, Fortune, Money, CNNMoney, Quartz, MarketWatch, Al Jazeera America, International Business Times, USA Today, The Washington Post, The Detroit Free Press and Michigan Alumnus magazine. In another life, she was also the founder and editor of Nirali Magazine, a popular website for the South Asian diaspora. Ismat is a graduate of the University of Michigan and the Columbia University Graduate School of Journalism.