Older Folks Lose Billions to Scams
Nov. 05, 1997
DES MOINES, Iowa (AP) _ The nursing home bills for his wife's care were mounting when the letter arrived telling Martin Hentsch he was a finalist to win big money.
So he sent in an entry fee for the sweepstakes, purchased what the company told him he needed to buy to be eligible and waited to collect.
But the only thing that came was more letters that Hentsch followed with more cash.
It wasn't until the 89-year-old retired music teacher died four years later that Carolyn Harris found thousands of dollars in canceled checks, cheap sweepstakes prizes and reams of letters as she cleaned out her father's home.
``What's so funny is if he happened to have a high bill _ like one month he left his water running _ or if there was a 2- or 3-cent markup on canned goods, he'd complain,'' Harris said. ``And yet he'd turn around and send $20 or $30 to these people.''
Nationwide, people lose an estimated $4 billion in mail scams and $40 billion in telemarketing fraud each year. Too often the intended targets are older Americans like Hentsch.
``We estimate that, conservatively, 50 percent of the time, these people victimize the elderly,'' said Chuck Owens, chief of the FBI's Financial Crimes Section in Washington. ``To me that's the real crime here.
``Many times you've got senior citizens who basically need the money that they've saved to continue to provide for themselves in their elder years, and we've had numerous instances where they've taken every cent,'' Owens said.
But the FBI, state authorities and the American Association of Retired Persons are fighting back with counteractive measures and tougher laws, and they are seeing signs of success.
``We're turning the tables on these con artists and telling them, `We're not going to take it. If you come in contact with us, you may end up getting turned over to the law,''' said Ted Bobrow, an AARP spokesman in Washington.
Iowa, which has one of the nation's oldest populations, has made a priority of stopping the fraud and has created model programs, including one in which calls to a victim's phone number are forwarded to the attorney general's office to be recorded for prosecution.
A state law also carries a penalty of up to $40,000, with an additional $5,000 possible if the intended victim is 65 or older.
Bill Brauch, director of the attorney general's Consumer Protection Division, said the efforts helped reduce complaints by two-thirds last year.
From October 1993 through July 1997, Iowa Attorney General Tom Miller's office charged 33 people with violating the state's criminal Fraudulent Telemarketer Law. Of those, 32 have been convicted and one is awaiting trial.
``We think the word is out not to call Iowa,'' Brauch said. ``And in fact we know it is. When the FBI has executed search warrants, they have found little signs posted that say `Do not call Iowa.'''
Federal mail and wire fraud charges, which had a five-year maximum penalty, now carry an additional five years for telemarketing fraud or an additional 10 years if 10 or more senior citizens are targeted.
A law passed in 1995 also allows states to go to federal court to get a national injunction to prevent companies from moving on under a different name after being banned in one state.
Authorities say older Americans are easy targets because they are often home during the day when calls are made and often are too polite to hang up on someone.
``Folks who are a little bit older grew up a little bit different than those of us raised in the '60s and '70s when we questioned authority,'' Brauch said.
``Older citizens grew up with respect for leaders and respect for authority,'' he said. ``And I think they view some of these phone calls as coming from an authority figure, someone who appears to have more information than they do about something.''
Hentsch had been living alone since 1986 when his wife, Ruth, moved to a nursing home.
``The expense is tremendous, and he kept getting these things _ `You're a finalist! You're going to win big!''' Harris said. ``I'm sure he thought he was doing something right, that he was really going to win and everything would be OK.''
In the world of mail fraud, Hentsch was branded. His name was on a so-called ``mooch list'' being sold among scam artists. Harris believes her father lost about $16,000 between 1991 and his death in 1995.
``If your name is on that list, you can count on getting call after call after call,'' Bobrow said. ``Con artists are buying and selling, at a premium, the names and addresses and phone numbers of people who are identified as an easy mark.''
An AARP study of one list found that 56 percent of the names were people older than 50. AARP and the FBI hold phone rallies to call people whose names appear on such lists and warns them about telemarketing fraud.
Recently, the FTC's Bureau of Consumer Protection launched a campaign to collect and review direct mail for possible examples of new fraud and to support existing cases.
As part of ``Project Mailbox,'' Bobrow said more than 10,000 association members are collecting unsolicited mail for review by a law enforcement strike force for possible legal action.
``In our investigations of these cases, we find nothing more tragic that a senior victim on the brink of financial ruin because of the predatory conduct of ruthless telemarketing criminals,'' said Kenneth Hunter, chief U.S. postal inspector. ``These are not isolated cases any more; sadly, we find them in fully a third of all fraud investigations we conduct.''
And somewhere out there, Hentsch's name is still on someone's list.
``He's been dead two years and we get these letters still,'' Harris said. ``And I've written back to some of these psychics telling them they must really have a direct connection with heaven, because he's there.''