Sweepstakes fraud targets elderly
By Claudia Buck - cbuck@[EMAIL PROTECTED]
12:00 am PDT Tuesday, June 24, 2008
As a financial fraud against the elderly goes, it's a classic.
For months, 84-year-old Martha C.'s mailbox in the Sacramento area was
cluttered with sweepstakes letters. Often marked "Urgent" or "Prize
Research Intelligence Agency," the letters wooed her with enticing-
sounding offers of potential big winnings.
Trying to better her chances, she sent in $10 here, $20 there. With a
son and a disabled daughter who could use the money, the churchgoing
widow was always hopeful.
Then a few weeks ago, Martha, who asked that her last name not be
used, got the phone call she'd been waiting for.
"Congratulations! You've won!" said the caller, claiming to be from
Publishers Clearing House, the well-known sweepstakes company.
Her prize: $42,000.
To collect: Go to her bank, withdraw $2,600 - to cover "luxury taxes"
- and wire the money to a Western Union office in Atlanta.
In three days, the caller said, her $42,000 check would arrive in the
mail.
Martha had misgivings - "I'm always suspicious when someone is giving
away money, but there's always a chance" - but she did as instructed.
"I knew as soon as I got in the bank I was making a mistake," she
said.
Her instinct was right. It's been more than three weeks and her
$42,000 check has never arrived.
Nor does she have any hope of getting back her $2,600 - or the $140
she spent to wire the money.
Instead, she's received an escalating series of calls from other
telemarketing solicitors, urging her to send them money - sometimes
belligerently, she says. And there's the daily mail deluge: In one
recent week, Martha received about 30 sweepstakes- type letters from
across the country.
Sweepstakes fraud is perhaps the best known of so-called mass
marketing schemes - including investment scams and other money fraud
by mail, phone or e-mail - costing consumers more than $3.4 billion
between 2001 and 2006, according to the FBI.
Last year, it was the secondmost common type of telemarketing fraud in
the United States, according to the National Consumers League.
"More than half of the scams that are geared toward seniors are
generated by a phone call," said James Perry, spokesman for the
National Consumers League. "Scammers are better able to sweet-talk or
otherwise convince seniors, who may be more trusting, into handing
over their money."
And it shows no sign of decreasing. "It's increasing nationwide and
worldwide because it's very lucrative and very difficult for law
enforcement to stop it completely," said Randy Wolverton, an expert in
elderly fraud with the FBI's economic crimes unit in Wa****ngton, D.C.
He said the FBI believes these scams are "vastly underre****ted"
because of the reluctance of many elderly to re****t being a victim.
And as in Martha's case, once a person sends money - even a small
amount - to a phony sweepstakes company, the con artists begin ramping
up with repeated phone calls and mailings.
"Once they get that first piece of money, they're relentless,"
Wolverton said.
The problem can quickly escalate because scammers often exchange or
sell their "sucker lists" of victims to other scammers.
Law enforcement officials say it's exceedingly difficult to track the
perpetrators. They use phony addresses, provide phone numbers to
disposable cell phones and, in recent years, have increasingly moved
their operations to Canada or overseas.
According to the California attorney general's office Web site, the
companies "seldom are found in the same state as the consumer, often
are in another country, or cannot be found at all. They hide their
true owner****p, thereby making prosecution very difficult."
Even if shut down, they often reappear with a different address or
location.
State and federal law make it illegal to require someone to make a
purchase to enter a sweepstakes. But the wording on sweepstakes
mailings can be deliberately confusing and designed to skirt the law.
Herschel Elkins, California special assistant attorney general, said
seven years ago California and some 23 other states got injunctions
and levied millions in investigative fees against several major
companies involved in sweepstakes offers, including Time Inc., Readers
Digest and Publishers Clearing House, after accusing them of
misrepresenting the chances of winning. Many of their mailings
targeted the elderly.
Problems with those legitimate companies have largely disappeared,
according to the California attorney general's office.
"What we're seeing today are the smaller sweepstakes companies... who
lead people to believe they've been 'specially chosen' to win or
should spend money or buy a product to give them a better chance,"
Elkins said.
The warnings about these scams are out there, but not everyone sees or
heeds them. Publishers Clearing House itself has told consumers to
beware of unsolicited phone calls from individuals fraudulently
offering prizes in its name. Publishers Clearing House always sends
someone to your door, the Web site notes, not a caller to your phone.
If you get such a call requesting a fee to receive a prize, it says,
do not send money. Instead, call and re****t the fraud to them at (800)
645-9242.
Similarly, Western Union - on its Web site and in print on the back of
its forms - warns consumers not to wire money to someone they don't
know. The Web site specifically cites lottery scams as potentially
dangerous.
"We train all of our agents to ask customers: Do you know who you're
sending this money to?" said Kristin Kelly, spokeswoman for Western
Union in Englewood, Colo.
Banks, too, say they're well aware of the problem.
"We have a lot of these phony lottery or sweepstakes scams," said
Wells Fargo spokeswoman Julie Campbell. "Unfortunately, these types of
scams aren't new to us."
For that reason, scammers often instruct their victims not to disclose
to bank tellers the reasons for their withdrawals. That's what Martha
said she was told, too.
Wells Fargo and other banks urge customers to immediately notify them
if they or someone they know is a victim of a sweepstakes fraud.
Given the difficulty in tracking the scammers, family members or
caregivers are advised to be alert to potential fraud. If you're at an
elderly person's home and see too many magazine subscriptions,
literature from foreign countries or multiple sweepstakes envelopes,
pay attention.
After she realized she'd been taken, Martha closed her bank account,
filed a police re****t and stopped listening to her voice messages.
Now, slightly embarrassed and somewhat frightened by her experience,
she is resolute that she doesn't want her mistake to happen to anyone
else.
When she "confessed" at her Bible study group that she'd been sending
in sweepstakes money, Martha said almost every hand went up. They had,
too.
http://www.sacbee.com/103/v-print/story/1034731.html
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