Telemarketing thieves sharpen their focus on the elderly
Bank accounts made vulnerable, records show
NEW YORK -- The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers, and thousands of other elderly Americans and posed as government and insurance workers updating their files.
Then, the criminals emptied their victims' bank accounts.
Richard Guthrie, a 92-year-old Army veteran, was one of those victims. He was on scam artists' lists because his name, like millions of others, was sold by large companies to telemarketing criminals, who then turned to major banks to steal his life's savings.
Guthrie, who lives in Iowa, had entered a few sweepstakes that caused his name to appear in a database advertised by
InfoUSA advertised lists of "Elderly Opportunity Seekers," 3.3 million older people "looking for ways to make money," and "Suffering Seniors," 4.7 million people with cancer or Alzheimer's disease. "Oldies but Goodies" contained 500,000 gamblers age 55 and older, for 8 1/2 cents apiece. One list said: "These people are gullible. They want to believe that their luck can change."
As Guthrie sat home alone -- surrounded by his Purple Heart medal, photos of eight children, and mementos of his wife, who died nine years earlier -- the telephone rang day and night. After criminals tricked him into revealing his banking information, they went to
"I loved getting those calls," Guthrie said in an interview. "Since my wife passed away, I don't have many people to talk with. I didn't even know they were stealing from me, until everything was gone."
Telemarketing fraud, once limited to small-time thieves, has become a global criminal enterprise preying upon millions of elderly and other Americans every year, authorities say. Vast databases of names and personal information, sold to thieves by large publicly traded companies, have put almost anyone within reach of fraudulent telemarketers. And major banks have made it possible for criminals to dip into victims' accounts without their authorization, according to court records.
The banks and companies that sell such services often confront evidence that they are used for fraud, according to thousands of banking documents, court filings, and e-mail messages reviewed by The
Although some companies, including Wachovia, have made refunds to victims who have complained, neither that bank nor infoUSA stopped working with criminals even after executives were warned that they were aiding crimes, according to government investigators. Instead, those companies collected millions of dollars in fees from scam artists. (Neither company has been formally accused of wrongdoing by the authorities.)
"Only one kind of customer wants to buy lists of seniors interested in lotteries and sweepstakes: criminals," said Sergeant Yves Leblanc of the Royal Canadian Mounted Police. "If someone advertises a list by saying it contains gullible or elderly people, it's like putting out a sign saying 'Thieves welcome here.' "
In recent years, despite the creation of a national "do not call" registry, the legitimate telemarketing industry has grown, according to the Direct Marketing Association. Callers pitching insurance plans, subscriptions, and precooked meals collected $177 billion in 2006, an increase of $4.5 billion since the federal do-not-call restrictions were put in place three years ago.
That growth can be partly attributed to the industry's renewed focus on the elderly. Older Americans are perfect telemarketing customers, analysts say, because they are often at home, rely on delivery services, and are lonely for the companionship that telephone callers provide.
Some researchers estimate that the elderly account for 30 percent of telemarketing sales -- another example of how companies and investors are profiting from the growing numbers of Americans in their final years.
While many telemarketing pitches are for legitimate products, the number of scams aimed at older Americans is on the rise, the authorities say. In 2003, the Federal Trade Commission estimated that 11 percent of Americans over age 55 had been victims of consumer fraud. The following year, the FBI shut down one telemarketing ring that stole $1 billion and spanned seven countries, resulting in 565 arrests. Since the start of last year, federal agencies have filed lawsuits or injunctions against 68 telemarketing companies and individuals accused of stealing a total of $622 million.
"Most people have no idea how widespread and sophisticated telemarketing fraud has become," said James Davis, an FTC lawyer. "It shocks even us."
Many of the victims are people like Guthrie, whose name was among the millions that infoUSA sold to companies under investigation for fraud, according to regulators. Scam artists stole more than $100,000 from Guthrie, his family says.
How they took much of it is unclear, because Guthrie's memory is faulty and many financial records are incomplete.
What is certain is that a large sum was withdrawn from his account by thieves relying on Wachovia and other banks, according to banking and court records. Though 20 percent of the total amount stolen was recovered, investigators say the rest is gone to schemes too complicated to untangle.
Senior executives at infoUSA were contacted by telephone and e-mail messages at least 30 times. They did not respond. Wachovia, in a statement, said that it had honored all requests for refunds and that it was cooperating with authorities.
Guthrie, however, says that thieves should have been prevented from getting access to his funds in the first place.
"I can't understand why they were allowed inside my account," said Guthrie. "I just chatted with this woman for a few minutes, and the next thing I knew, they took everything I had."