The latest scam trend is taking advantage of people struggling as everyday cost of living rises.
The U.S. cost of living in 2022 is increasing at a rate that hasn’t been seen since the 1980s - as the price of food, real estate, healthcare, transportation and even homeowners insurance/car insurance goes up. Unfortunately, average wages for workers aren’t keeping up with the current trajectory of inflation, which is putting many Americans in a difficult financial situation. (Bank Rate, 2022).
With living costs surging, scammers are preying on our financial fears.
Here’s are the top 4 cost of living scams that people may be particularly susceptible to as living costs rise:
1. Tax Scams
Scammers are mimicking the IRS via phone calls, texts and emails threatening individuals to pay non-existent tax bills or try to tempt them with ‘tax rebates’. According to the IRS, thousands of people have lost millions of dollars and their personal information to tax scams (IRS, 2022).
How to Avoid Falling for Tax Scams:
Remember that the IRS will never initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information (IRS, 2022).
Also, keep in mind that actual IRS representatives will never demand payment over the phone or threaten to send the police. A real representative will be able to inform you of your rights as a taxpayer, which includes the right to question your bill and receive a clear explanation of what you owe (First Tech, 2022).
2. Insurance Scams
The FBI explains the total cost of insurance fraud is estimated to be more than $40 billion per year - meaning Insurance Fraud costs the average U.S. family between $400 and $700 per year (FBI, 2022).
Scammers are attempting to lure in targets with extremely cheap insurance deals – “particularly young drivers, who often pay more for their insurance and may be inexperienced at buying coverage” (NewsChain, 2022).
How to Avoid Fake Insurance Scams:
Don't let anyone threaten or rush you into signing an agreement before you're ready, and have done ample research of the insurance company.
Always collect and compare several quotes from a select group of providers before making a decision.
3. Fake Package Delivery Scams:
Many people are receiving text messages concerning fake package collection with a link that, when clicked, asks for authorization of their information like delivery address, phone number, card and bank details in order to deliver the package. After providing this information, they receive a call claiming to be from their bank's fraud department, saying there had been suspicious activity on their account and then convinced to transfer their money into a new "safe" account. (BBC, 2021)
Genie has previously published an entire article with more information about how to avoid package delivery scams here: https://www.lifesgenie.com/post/avoid-package-delivery-scams
4. Fake rebates
Scammers approach individuals pretending to be from the government, a bank or some other trusted organisation with false claims that they are entitled to a reimbursement or rebate, such as for overpaid taxes, bank fees or some sort of compensation.
They target through mail, telephone, email, text message or social media asking you to make a small initial payment to cover 'administration fees' or taxes, in order to claim the amount owed to you. If you hand over your money, you will lose it and not receive any rebate. If you provide your credit card or banking details, you may find that more is taken out than expected (Scam Watch, 2022).
How to Avoid Fake Rebate Scams:
Verify the identity of the contact by calling the relevant organisation directly – Search for them online. Do not use the contact details provided in the message sent to you.
Remember, government departments or trusted companies will never contact you asking you to pay money upfront in order to claim a fee or rebate.
Scammers will often ask you to use an unusual payment method, including preloaded debit cards, gift cards, iTunes cards or electronic currency such as Bitcoin