That's right, the Social Security Administration (SSA) has paid $30 million to the wrong bank accounts over the past four years.
That's hard-earned money that came out of your paycheck going to an already depleted fund, only to line the pockets of criminals — hackers, to be exact.
But that massive multimillion-dollar get-away sum isn't even the most alarming part about this news.
Those "Wrong Bank Accounts" Were Actually Dummy Accounts
First, here's how hackers nabbed all this cash for themselves:
In 2012, the Social Security Administration (SSA) launched its "My Social Security" program, which allowed beneficiaries the option of having their payments directly deposited into their own bank accounts.
A year later, the SSA enhanced the program by allowing individuals the option to change their direct deposit bank information online.
And this is where hackers swooped in. They exploited this "account change feature" by entering their own bank account information into the spaces where beneficiaries' should have gone.
Right away, the SSA began receiving fraud allegations.
So an investigation ensued.
This probe of the "My Social Security" system wound up lasting three years. The Office of the SSA Inspector General released its findings in an audit earlier this month, on Aug. 17. It revealed the following sums of misdirected cash:
- In 2014, $6.8 million was misdirected
- In 2015, $3.4 million
- In 2016, $0.7 million
This morning, FOX News revealed that in 2013, $20 million in SS beneficiary funds went to the wrong accounts as well.
That's $30.9 million total in misdirected funds under the SSA hack.
What's more outrageous about these revelations, however, is that roughly half of that money listed above hasn't been recovered.
And it never will be…
Spent Misdirected Funds Cannot Be Returned
In the audit report released this month, the SSA noted that "generally, financial institutions only return misdirected funds to the Department of the Treasury when the funds are still in the bank account."
This means if hackers successfully redirected funds into their own accounts and then withdrew or spent that money before the audit caught onto their scheme, the affected beneficiaries were – and still are – out of luck.
Here's an exact figure of those unrecovered sums:
- In 2014, $6.8 million was misdirected; $3 million wasn't recovered
- In 2015, $3.4 million; $2.5 million wasn't recovered
- In 2016, $0.7 million; $0.7 million wasn't recovered
This morning, FOX News revealed that in 2013, $9 million of the $20 million lost in SS beneficiary funds wasn't recoverable either.
In all, since 2013, $30.9 million in beneficiary funds has been stolen from the SSA, of which $15.2 million can't be recovered.
The good news is the number of payments being deposited into wrong accounts is declining, with only 553 individuals with misdirected benefits last year, down from over 2,100 in 2015.
And in the years since the probe officially kicked off, the SSA has issued various ways with which retirees and Social Security beneficiaries can protect themselves.
Here's what you can do…
How to Protect Yourself from Social Security Fraud
Don't Give Hack Phone Callers Your Information: The SSA (or any other government agency, for that matter) will not call you to request your personal information. If someone does call you and claims to be an SSA or government worker, ask for their name and number, and then call your local SSA or other government office to verify the caller's identity.
Monitor Your Accounts Regularly: Check in on all of your personal and financial accounts for any irregularities and report fraud immediately to the appropriate agencies.
Beware of Phishing Scams: No reputable financial institution or company will ask for upfront money in exchange for winnings, or for personal information like a Social Security number or bank account number, via phone, mail, or the Internet.
More on Retirement: Keith Fitz-Gerald wants to make sure our Members know about one of his favorite retirement investments. It's a kind of "desert island fund" he'd buy if he had to park his money in one place, "retire" from civilization for 20 years, and come back to a pile of money. Click here to learn more…
- SSA.gov: Unauthorized My Social Security Direct Deposit Changes in Calendar Years 2014 Through 2016
- FOX News: Over $6M in Social Security Benefits Stolen from Bank Accounts
- Money Morning: President Trump Is Repeating the Same Social Security Mistake That Obama Made
- Money Morning: The 3 Changes Congress Will Make to Social Security – and How to Prepare
- Money Morning: Proof the Social Security Trust Fund Is Just a Stack of IOUS in a West Virginia Filing Cabinet