If you’re of a certain age, you may recall the famous song by the legendary songwriter Burt Bacharach, titled: “Make it Easy on Yourself.”
This isn’t about breaking up (“which is so hard to do”) but about assuming your Social Security number has been hacked. Because there have been so many large-scale hacks, you should assume your Social Security number is on the dark web and available for sale or use by criminals.
While we’ve certainly shared a lot about protecting yourself from scams, here’s one we’ll mention again: register with the IRS to get an annual PIN filed with your income tax return.
Imagine how you would feel when you file for your income tax refund only to learn the check was already mailed. Well, someone with your Social Security number and a little bit more information - which is also likely available on the dark web - can file for your tax refund and have the check sent to them.
Kudos to the IRS for taking action. Log into IRS.gov, scroll down to the bottom of the page to Tax Scams, and click Get an Identity Protection PIN. You can get your PIN either online or via the mail, but please take a few minutes to do either.
The next time you file for a tax refund, eliminate the worry that somebody beat you to your money.
Speaking of Scams
Capital One's website1 includes a warning about online scams. Specifically, it warns that scammers are setting up fake websites.
According to Capital One: “Online shoppers can be deceived by scammers setting up fake websites or social media ads to offer attention-grabbing deals on popular items. These scammers may impersonate a legitimate business or person but never deliver on the promised goods and services. Some websites may even use fake checkout processes, which can lead the buyer to lose money or have their personal info stolen.
“Always check ratings, reviews and other listings about a business or person to verify their trustworthiness and authenticity. Beware of deals that sound too good to be true, especially when found on lesser-known or newer sites. Never send deposits to hold items before confirming they’re real.”
Unfortunately, it can get even worse
“For nearly three months, Barry Heitin, a 76-year-old retired lawyer, thought he was part of a government investigation that felt like something out of the movies. He was actually assisting criminals in stealing hundreds of thousands of dollars – of his own money.”2
When Mr. Heitin could not log into his 401(k) account and saw a pop-up on his screen, he called the number on the pop-up. (Mistake #1: Never call a number on a pop-up. Never.) The man who answered his call said he was with the fraud investigations department. When the man told Mr. Heitin about issues with another bank where Mr. Heitin had accounts, he said those funds were also at risk. (Mistake #2: Go to an account statement or verified website to obtain a verified phone number for any 401(k) provider.)
The alleged fraud investigator, a Mr. Hunt, put Mr. Heitin in touch with a Mr. Smith, who was allegedly with the bank where Mr. Heitin had his other accounts. (Mistake #3: Mr. Heitin failed to go to an account statement or verified website to get a verified phone number for the bank where he had his accounts.)
A third man, Mr. Whitrock, also came on the line, and said he was with the Internal Revenue Service. He asked Mr. Heitin to help with an investigation being conducted by the IRS, and Mr. Heitin then agreed. (Mistake #4: Mr. Heitin failed to go a verified website to call a verified phone number for the IRS to confirm Mr. Whitrock’s identity.)
The instructions that Mr. Heitin then followed over three months included withdrawing funds from his accounts and transferring them to Bitcoin sites, ATMs, and wire transfers. (Mistake #5: Never withdraw any funds from any accounts when told to do so by an unconfirmed third party.) Mr. Heitin, of course, was told to keep all proceedings strictly confidential. (Mistake #6: Always share this sort of ‘clandestine’ information with someone you trust before doing anything.)
When Mr. Heitin moved funds from his IRA account, he even failed to disclose what was happening to his long-time financial advisor. (Mistake #7: See Mistake #6.) In the end, he moved $834,000 out of his IRA accounts, along with $113,000 from checking and savings accounts.
When the scam finally ended, Mr. Heitin had lost $740,000. Regretfully, it gets even worse. Since he withdrew money from his IRA account, Mr. Heitin also owes taxes of $285,000 on those withdrawals.
1 “Credit Cards, Checking, Savings & Auto Loans.” Capital One, www.capitalone.com/. Accessed 1 Oct. 2024.
2 Siegel Bernard, Tara. “How One Man Lost $740,000 to Scammers Targeting His Retirement Savings.” The New York Times, 29 July 2024.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by S.F. Ehrlich Associates, Inc. (“SFEA”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from SFEA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. SFEA is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of SFEA’s current written disclosure Brochure discussing our advisory services and fees is available upon request. If you are a SFEA client, please remember to contact SFEA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, or revising our previous recommendations and/or services.
