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Raise Your Phone Scam Awareness

Phone scams are on the rise, costing Americans over $20 billion in 2020.(1) In the US, 27% of aging adults live alone,(2) and they’re the most likely to be targeted for scams.(3) Unfortunately, many people don’t discover scams until it’s too late. If you find yourself on the other line with a fraudster, will you hang up or be swindled out of your hard-earned savings? Learn some tips to protect yourself from phone scammers.

What are the Three Top Phone Scams

To protect yourself against future phone scams, it’s important to understand them. Here are three of the most effective approaches used against aging adults.

  1. Government impostor

The last organization we want to get a call from is a government agency. A government impersonator might even give you their “employee ID number” to sound official. They might even have information about you, like your name or home address.

Why this works

If we think a government official is calling, it’s natural to think we might have done something wrong. Did I forget to send or sign a required form? Scammers often say they work for the Social Security Administration, the IRS, or Medicare. They’ll give you a compelling reason why you need to send money or give them personal information immediately.

2. Grandparent scam

The victim gets a call from someone posing as his or her grandchild. This person explains, in a frantic-sounding voice that he or she is in trouble and needs money (e.g., there’s been an accident, arrest, or a robbery). To add to the urgency, the caller might claim to be hospitalized or stuck in a foreign country. They may even throw in a few family particulars, gleaned from the actual grandchild’s social media activity to make the impersonation even more convincing.

Why this works

The impostor offers just enough detail about where and how the emergency happened to make it seem plausible and perhaps turns the phone over to another scammer who pretends to be a doctor, police officer, or lawyer to back up the story. The scammer impersonating a “grandchild” implores the target to wire money immediately, adding an anxious plea: “Don’t tell Mom and Dad!”

3. Robocall phone scam

These computer-generated calls are first trying to verify that you are a real person. This may entail just recording your “Yes” answer to “Can you hear me?” for further use, possibly to authorize bogus charges. They may leave a voicemail about an Amazon purchase made on your account, asking to call back to clear up a problem. If you answer the phone and there is a long pause, that could be because the call is being switched to a call center of trained phone scammers—that is a good time to hang up.

Why this works

If you get a voicemail about a problem with your Amazon purchase, we might be relieved someone found the problem. If you call back, a scammer will seem willing and able to help solve the problem. While they may seem friendly and helpful, they’ll be trying to gather personal information to swindle their victims’ money.

Tips to Help Protect You from Phone Scams

Train yourself to avoid answering calls from unknown numbers. If it’s important and relevant to you, such as a call back from someone that you telephoned, the caller will leave a message. If you do pick up the phone, use suggestions from this list:

  1. If a caller asks who you are, or if this is [your name], ask them to identify themselves and their company first, and where they’re calling from. If you don’t recognize them, ask for a phone number you can use to call them back. (In many cases, you won’t get one—a red flag.) You can also google the company “calling” you then call them to confirm their legitimacy.
  2. Be cautious about caller ID numbers that seem legitimate. You may not be able to tell right away if an incoming call is using Caller ID spoofing. Beware: Caller ID showing a “local” number does not necessarily mean it’s a local caller.
  3. If you answer the phone and the caller, or a recording, asks you to hit a button to stop getting the calls, hang up. Scammers often use this trick to identify potential targets.
  4. Don’t respond to any questions asked by a robocall that tries to verify your name. For example, “Is this Robert?” answered with “Yes.” They may record your response and use it to authorize purchases.
  5. Set a password for your voicemail. If a hacker gets your phone number, they may be able to gain access to your voicemail if it’s not password protected.
  6. Talk to your phone company about available call-blocking tools and check into apps that block unwanted calls on your phone.
  7. Realize that it’s highly unlikely that a government organization would ever contact you by phone. If you get a call from someone posing as a government official, hang up. If needed, they’ll contact you by mail.

Protect Yourself

Don’t answer calls from unknown callers. If it’s a legitimate caller, they’ll leave a message. Explore settings on your mobile phones and try turning on the “Silence Unknown Callers” feature.

Also reference our prior blog post on “Tips for Preventing Fraud” and BFSG’s client alert “Protect Yourself, Protect Your Data”.

  1. Protecting Older Consumers, Federal Trade Commission, 10/18/20
  2. Older people are more likely to live alone in the U.S. than elsewhere in the world, Pew Research Center, 3/10/20
  3. People who live alone among the likely to be scammed, Cadillac News, 10/17/19

Prepared by Hartford Funds, “The Data Doesn’t’ Lie – Raise Your Phone Scam Awareness”, March 5, 2021. Author: Laurie Orlov is a tech industry veteran, writer, speaker, and founder of Aging in Place Technology Watch.  Edited by BFSG, LLC.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

Jerome Powell’s Jackson Hole Economic Symposium Speech

By:  Thomas Steffanci, PhD, Senior Portfolio Manager

The stock market (1) has reacted bullishly today to Federal Reserve Chairman Jerome Powell’s prepared remarks at the Federal Reserve Bank of Kansas City’s Economic Policy Symposium in Jackson Hole, WY. It was his first public admission of where he stood on tapering that pushed stocks higher: “At the FOMC’s recent July meeting, I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.” Despite Powell reiterating his Federal Open Market Committee (FOMC) meeting comments, the speech comes away as especially dovish,  in saying it would be wrong to respond to temporary fluctuations in inflation and his repeated statement that “the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of an interest rate liftoff,”  added to the dovish tone.

It was a masterful performance from a Chairman whose FOMC committee members were split on the timing and speed of tapering. Without giving a specific timetable for tapering, he has bided his time to see more data on unemployment and inflation. He will get his first important data point in Thursday’s August payroll employment report.

  1. The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

The Bond Vigilantes Sing Don’t Cry for Me Argentina

By:  Steven L. Yamshon, Ph.D., Managing Principal

James Carville, President Clinton’s political consultant said at the time when Clinton was President, “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” 

Back in the early 1980’s, bond investors were a force to be reckoned with and these “bond vigilantes” took matters into their own hands when the government was fiscally irresponsible, selling bonds en masse, pushing up interest rates sharply higher and forcing the government to get serious. What is a bond vigilante and why does it matter? The truth is any bond investor is a potential member of this esteemed group. Investors who purchase fixed income products such as bonds want a positive real return on their investment. The real return is the return after inflation, and this is what counts, because it is what your money buys. Inflation erodes your purchasing power.

When the Great Financial Crisis occurred in 2008, the Federal Reserve (the “Fed”) had to use all the tools at their disposal to keep the economy from sliding into a depression. Lowering interest rates is just one tool at their disposal and the Fed lowered interest rates close to zero. To keep interest rates near zero, the Fed implemented a never-tried-before technique called Quantitative Easing (“QE”). Without getting too technical, this operation is called money printing and is equivalent to dropping money from helicopters. In 2008, the Fed had to do this to save the economy.  In 2020, the Fed did it again because of the COVID-19 pandemic but at greater speed and intensity. Most likely, this was an overkill, and we believe it will lead to a sustained level of higher trend inflation.

Where are the bond vigilantes? After all they have been in hibernation for a long time. There is one reason and one reason only. Inflation was low until now. However, the U.S. economy may be at a pivotal turning point. If history is any guide the bond vigilantes will most likely wake up in the next several years. In the 1930-1950 period, inflation spiked because of dollar devaluation during the 1930’s and to finance World War II (Chart 1). During this period the Federal Reserve accommodated fiscal spending by their massive power of the printing press.

Chart 1: Inflation (1930-2021)

When President Lyndon B. Johnson wanted to eliminate poverty and pay for the Vietnam War, known as “guns and butter,” he did so without raising taxes. This set off a stagflation period that lasted from 1969 to 1985 and only ended when Federal Reserve Chairman Paul Volcker raised interest rates to 20% (Chart 2). Volcker had no choice. He had to stamp out inflation and the bond vigilantes forced his hand.

Chart 2: Interest Rates (1970-2021)

By mid-decade, we believe the bond vigilantes will come out of their long-lasting sleep because the U.S. fiscal position will become unsustainable. The budget deficit, and trade balance of payments is exploding upwards. The major reason why the United States is not in the same situation as Buenos Aires, Argentina, is because the U.S. Dollar is the global reserve currency, but that exclusivity is eroding.

At some point investors here and abroad will say “enough is enough” and want increased compensation for the risk of holding U.S. government debt. That is when the bond vigilantes will awaken from the dead like the rise of the Phoenix and sing “Don’t Cry for Me Argentina”.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

The Economy is Tapering Ahead of the Fed

Source: J.P. Morgan Asset Management, Guide to the Market

By:  Thomas Steffanci, PhD, Senior Portfolio Manager

The July minutes of the Federal Reserve’s (the “Fed”) latest policy meeting were released on August 18th to the hue and cry of Wall Street pundits about the Fed making plans to pull back the pace of their monthly bond purchases before the end of the year.

The ongoing assumption has been that the Fed’s tapering would begin next year and be spread throughout 2022. The stock market reaction was swift and sharp as the Dow Jones Industrial Average fell nearly 2% in two days as expectations swirled that the first rise in the Federal Funds rate may be similarly pushed forward to next year, rather than in the prevailing opinion to 2023.

Now so far, the Fed has not disclosed any timetable of either of those two events. Several members of the Federal Open Market Committee (FOMC) have made public comments about a timetable which on balance has called for an early start to tapering and a year-end 2022 first increase in the Federal Funds rate. These members have touted the strength of the economy as rationale for their views.

Why is all this important? Because current, real time, economic data are indicating a sharp slowing of the economy, especially in retail and home sales, along with continued declines in consumer buying intentions and homebuyer expectations. And survey data show consumers now expect a more negative economic impact from Covid than they have for the past several months. Covid-sensitive spending in restaurants, air travel and hotels has weakened further in August. Higher frequency indicators of consumer activity such as daily credit card spending have flat-lined since mid-July.

There is an historical irony in all of this. In past cycles, the Fed was behind the curve in reacting to rising inflation accompanying above trend economic growth, raising interest rates sharply and too late, precipitating a credit crunch and a recession, or a tightening policy in anticipation of rising inflation which did not occur (2017-2018).  What may be unfolding here is much the same thing.

If market signals are correct on the growth slowdown, which the Fed’s econometric models fail to pick up, they would wind up behind the curve by beginning to reduce their bond purchases too early, raising false expectations that current conditions cited above are mere transitory data points. They are likely not…the economy is tapering toward an identifiable growth slowdown in the months ahead, putting the Fed’s 7% estimate for 2021 GDP growth in serious jeopardy. The lesson is that the Fed will need to be more cautious in their plans for the speed and timing of their tapering plans.

What would be the market impact? As market signals become reflected in hard data, expectations of a Fed policy reset could elevate equity prices, raise commodity prices, and keep bond yields low. As 2022 is an off-year election, inflation would not be a policy problem in an economy that downshifts to trend growth, and any political resistance turns to congressional job preservation.

Chart Source: FactSet, Federal Reserve, J.P. Morgan Investment Bank, J.P. Morgan Asset Management. As of August 20, 2021.

*The end balance sheet forecast assumes the Federal Reserve maintains its current pace of purchases of Treasuries and MBS through December 2021 as suggested in the June 2021 FOMC meeting. **Loans include liquidity and credit extended through corporate credit facilities established in March 2020. Other includes primary, secondary and seasonal loans, repurchase agreements, foreign currency reserves and maiden lane securities. ***QE4 is ongoing and the expansion figures are as of the most recent Wednesday close as reported by the Federal Reserve.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.

Upcoming Compliance Deadlines

September 2021

15th: Required contribution to Money Purchase Pension Plans, Target Benefit Pension Plans, and Defined Benefit Plans.

15th: Contribution deadline for deducting 2020 employer contributions for those sponsors who filed a tax extension for Partnership or S-Corporation returns for the March 15, 2021 deadline.

30th: Deadline for certification of the Annual Funding Target Attainment Percentage (AFTAP) for Defined Benefit Plans for the 2021 plan year.

October 2021

15th: Extended due date for the filing of Form 5500 and Form 8955.

15th: Due date for 2021 PBGC Comprehensive Premium Filing for Defined Benefit Plans.

15th: Contribution deadline for deducting 2020 employer contributions for those sponsors who filed a tax extension for C-Corporation or Sole-Proprietor returns for the April 15, 2021 deadline.