Social Security fraud protection for scam victims, Digi Mart USA News: A 74-year-old woman reportedly wired $180,000 into what appeared to be a professional trading platform, with a dashboard showing her balance rising each week. When she tried to withdraw the funds, the site asked for a release fee and then stopped responding, and the money is gone.
Her monthly Social Security deposit of $2,170 remains, and fraud recovery scammers may target it next. According to the Federal Trade Commission, adults 60 and older reported about $3 billion in fraud losses for 2025, including more than $1 billion from investment scams, as reported in October 2026.
Victims are often contacted again by refund and recovery scammers, who purchase lists of people already defrauded and promise to recover money for an upfront fee. Some ask for Social Security numbers and bank details, which could allow a criminal to access an online Social Security account and redirect payments to a new bank.
Social Security allows beneficiaries to block electronic access to their records, which prevents online changes to direct deposit. The block also restricts the beneficiary’s own online account access, and later payment changes must be handled directly through Social Security after identity verification.
The article notes that companies in complaints reviewed by federal regulators often denied liability or said they could not reverse fraudulent transfers, making prevention more important than recovery. If the money came from a pretax retirement account, the withdrawal may be counted as taxable income, which can make up to 85% of Social Security benefits taxable under 26 U.S.C.
§ 86(a)(2). Medicare Part B premiums are also based on income from two years earlier, so higher income may raise premiums later.
Under the 2026 tiers cited in the report, a single filer with income between $171,000 and $205,000 pays $528 a month for Part B instead of the standard $203. The article states that Social Security may consider appeals for investment property lost to fraud but generally requires proof of conviction, which many victims do not obtain. A tax professional can also assess whether the loss qualifies as a deductible theft loss.
The report advises placing the electronic access block before responding to any recovery offer, since requests for fees, gift cards or account details are signs of a scam, and government agencies do not charge to take fraud reports. It also advises waiting before making further retirement withdrawals, because each additional withdrawal can raise future taxes on benefits and Medicare premiums.
The article notes that the actual tax impact and appeal options depend on the account involved and other income, and recommends consulting a tax professional before filing.
