SALT LAKE CITY — Machel Andersen and her husband, a Utah lawmaker, lost their life savings to a scammer who made the worried grandmother believe her Social Security number had been compromised and her family was in danger.
The $150,000 the Utah couple had saved for retirement is now gone. But they’re not alone in their loss.
Last year, Americans reported losing nearly $38 million to the scam, a relatively new fraud that targets older generations by making them believe they’re speaking with Social Security staff and that their number has been stolen. Often, the scammer will use personal information or tell the victim there’s a warrant out for their arrest to pressure them into wiring money.
In recent years, the Social Security scam has become the most-reported fraud to the Federal Trade Commission and the U.S. Senate Aging Committee’s Fraud Hotline. Since creating an online form less than three months ago, the Social Security Administration has received more than 115,000 complaints of the scam.
In an attempt to quell the scheme’s carnage, The Aging Committee invited Andersen and officials from the Social Security Administration, among others, to testify at a Wednesday morning hearing that explored how the scam operates and how it can be stopped.
Losing life savings
For Ogden resident Andersen, it was a Friday in early December when she got that first call. She was distracted by her grandchildren, who she was watching while her daughter recovered from surgery. When she realized she had received several voice messages from someone claiming they were from the Social Security Administration, she called the number back.
A man answered and gave her his badge number, urging her to look him up on the administration’s website to prove that he worked there. He then told her some bad news: her Social Security number had been compromised, and a car registered in her name was found covered in blood at the Texas-Mexico border.
He also claimed her Social Security number had been used to set up bank accounts associated with a drug cartel, then transferred her to someone named "Uttam Dhillon" with the Drug Enforcement Administration.
"Dhillon" told her she was in danger and that the cartel would be watching her every move — he even knew she was watching her grandchildren at the time and promised her they wouldn’t be safe unless she followed his instructions.
The only way to escape the situation was to cooperate with the government and transfer all of the money in her bank accounts to an off-shore account that would be safe from the bad men who had seized her Social Security number, he claimed. Otherwise, she’d lose all her money and the government would assume she was working with the cartel.
"I thought it was a little strange that this man had an Indian accent, but I looked him up on the DEA website, and it turns out that Uttam Dhillon really does work for the DEA and appeared to be of Indian descent." Andersen said during the committee hearing.
In a panic, the worried grandmother went to her financial institution and transferred all of the money in her savings accounts and CDs into her checking account, while the man insisted he remain on speakerphone as she did so. It was the end of the business week, so the man told her she would need to wire the money on Monday.
He then sent her an official warrant for her arrest and asked her to send him a picture of her driver’s license next to a note saying she would cooperate with the government. He then told her not to disclose what she was doing to anyone or she would be arrested and her family would be in immediate danger.
"That weekend was very tough. I decided to call the scammer back to see if there was some other way to handle the situation. He said that I had the choice to be arrested immediately and that I did not have to cooperate with him," Andersen said.
She asked if she could FaceTime him so he could prove he was who he said he was. He said that was impossible. So she asked that he send her local sheriff to her door to confirm this was a true story. He said he’d do so Monday.
But Andersen was 50 miles away at her daughter’s house Monday morning.
"I told him I would just have to trust him," she said.
So she scooped up her 7-year-old grandson and went to the closest American First Credit Union where she transferred her life savings to the Bank of China. The teller asked what the money was to be used for. "Electronics," she lied, just as the scammer had instructed her.
"I told him, (the scammer), I didn’t lie. He said that he understood, but that this was for the 'greater good,'" she said.
But Andersen didn’t realize "the greater good" was all a fraud until the scammer called back, insisting she needed to wire more money — even asking her to take out a mortgage on her house.
She wired tens of thousands more she and her husband had recently cashed out of investments but refused to take out a mortgage without telling her husband. The man threatened to have her arrested, then asked if she might be able to borrow money from friends for a few days.
A close friend told her he could lend her $60,000 but asked if she was being scammed. She assured him she was not. It wasn’t until later that weekend she decided to do a Google search to see if this was all "for real."
"(I) found out pretty quickly it was all a scam. I was devastated," she told the committee.
She broke the news to her husband later that evening.
"It was a very hard thing to tell him that I had lost all of our savings. He was so kind and understanding," she said, tearfully.
"For the last six weeks I have been asking myself how this could ever have happened to me? My husband and I had worked hard all our lives to save the money the scammers stole from us. We had hoped we could travel and do mission work with the money we had saved. Now, we can’t. Instead, we will need to work to try to replenish what I lost."
Avoiding the scam
While the Andersens said they were initially embarrassed to tell people their story, they hoped hearing it might help others avoid falling for the same scam. In fact, education is key to eradicating the fraud, said Social Security Administration inspector general Gail Ennis.
"Without question, short of completely eliminating telephone scams, the most effective way to combat them is by educating the public about this phenomenon and how people can identify and report scam calls," she said in submitted testimony to the Senate committee.
Though the median age of complainants who said they got a scam call was 59 years old (higher than the national median of 38), younger people fall victim to government imposter phone scams at higher rates than older people, Ennis said. Older people lose more money, though, she added.
"The median fraud loss amount for those ages 20-29 was $1,000, while for ages 80 and over, it was $3,000," she said.
And the scams don’t just affect the victims, but the Social Security Administration, too. Staff are met with distrust when they try to call people, and the fraud has caused a strain on the agency and its resources, Ennis explained.
The administration has since decided to take a three-fold approach to the problem by raising public awareness, responding to congressional requests for information that will help the government’s response moving forward, and devoting resources to investigative efforts. Victims of the scam calls can also report the fraud at https://oig.ssa.gov/scam.
To avoid falling victim to one of these scams, be wary of unprompted and threatening phone calls from people who claim to be from the Social Security Administration.
The agency does contact some people via phone, but it’s almost always people who already have contacted the agency and have current business with them. Administration staff will never make threats to arrest the person they are calling. Do not give out personal information over the phone or obey requests to wire money.
Andersen hopes her story will warn others.
"I don’t know if I will ever stop wondering why this happened," she told the committee. "(But) maybe my story will help stop these scammers, once and for all."