If you receive Social Security benefits, you need to be on alert because a dangerous new Social Security scam is making the rounds, and it’s designed to trick seniors and people with disabilities into handing over personal and financial information. As we move into the end of the year, scammers are using the annual cost-of-living adjustment (COLA) announcement to their advantage.
Let’s walk through how this scam works, what the Social Security Administration (SSA) actually does, and what you can do to protect yourself.
How the COLA Scam Works
The Better Business Bureau has reported a huge increase in scams tied to Social Security COLA. People are being contacted through phone calls, text messages, and emails. The messages usually sound urgent and official, and they claim you need to “apply” for or “activate” your COLA increase.
Scammers may tell you to click a link, call a phone number, fill out a form, or even pay a fee. These tricks are designed to pressure you into sharing sensitive details like your Social Security number or bank account information. But the truth is simple: COLA increases are automatic. You never need to apply, pay, or take any extra action to receive them.
How COLA Really Works
Here’s what actually happens with COLA. Each October, the Social Security Administration announces the COLA increase for the upcoming year. Those changes go into effect automatically starting in January. You don’t have to apply or activate anything—the SSA already has your information and will update your benefits on its own.
When SSA needs to communicate with you, they’ll do so through official letters sent by mail or through your secure My Social Security account. They will never contact you through text message, email, or a random phone call asking for personal details. They will also never ask for unusual forms of payment like gift cards, wire transfers, cryptocurrency, or gold. If someone does, that’s a scam.
What To Do If You’ve Been Targeted
If you’ve already given information to a scammer, don’t panic—but act quickly. Stop all contact with them right away. Then, log into your My Social Security account and change your password. If you shared financial information, call your bank or card company immediately to protect your accounts.
You should also consider placing a fraud alert or a credit freeze with the credit bureaus. Credit freezes are always free, even though some companies try to upsell you into paid “credit locks.”
Finally, report the scam. You can file a report with the Social Security Administration’s Office of the Inspector General, the Federal Trade Commission, and the Internet Crime Complaint Center at IC3.gov if you lost money. The faster you take action, the better your chances of limiting the damage.
Relief Recap
The bottom line is that COLA adjustments happen automatically. You don’t need to fill out forms, click links, or pay any fees. The SSA will announce the official number in October, and the change will happen with no action required on your part.
Scammers are working hard to take advantage of Social Security recipients right now, but you don’t have to fall for it. Remember that COLA adjustments are automatic and free—you never have to apply or pay for them. Any call, email, or text that tells you otherwise is a scam.