TELECOM Digest OnLine - Sorted: Elderly Americans Lose Millions in Internet Scams

Elderly Americans Lose Millions in Internet Scams

Reuters News Wire (reuters@telecom-digest.org)
Thu, 28 Jul 2005 14:24:29 -0500

Scams involving Internet auctions, as well as identity theft,
lotteries, prizes and sweepstakes, top the list of fraud complaints by
older Americans, who lost $152 million to con artists last year,
U.S. officials told a Senate panel on Wednesday.

Internet-based scams are growing and now account for about 41 percent
of fraud complaints the Federal Trade Commission receives from people
over 50, Lois Greisman of the FTC's consumer protection division told
the Senate Committee on Aging.

"This figure is all the more dramatic when one considers that
Internet-related fraud represented only 33 percent of all fraud
complaints from this age group in 2002," she said.

Older consumers reported being defrauded of more than $43 million last
year through Internet scams, with on-line auctions topping the
complaint list, she said.

But more old-fashioned scams continue to take their toll. Lottery and
sweepstakes frauds, in which victims are asked to pay "taxes" or other
fees to claim prizes, cost older Americans $35 million last year,
Greisman said. People over 70 are particular targets of that kind of
scam, she added.

Another popular scam involves fake credit card protection or discount
drug services, she said. Others involve scam artists saying they need
bank account information for Social Security or Medicare benefits.

"What is most disturbing is that these scams routinely top the FTC's
annual list of consumer frauds in the nation," said Sen. Gordon Smith
(news, bio, voting record), an Oregon Republican who chairs the Senate
Aging Committee. "It seems that even though we are aware of their
use, scam artists remain successful in pitching old scams to new
victims, perpetuating a cycle of victimization."

Anthony Pratkanis, a psychology professor at the University of
California who has been on a team of researchers examining elderly
fraud, said con artists steal using the weapon of "social influence"
to create a sense of trust rather than a gun or knife.

Research shows that not just the "frail and lonely" fall victim to
scams, he said. Active people who are leaders in their communities can
also fall prey.

"We find that con criminals profile their victims' psychological and
other characteristics to find their Achilles' heel ... to construct
the exact pitch that is likely to be most effective," he said.

In one example, con artists told a potential victim that to ask
questions or hang up the phone while they were trying to verify
account information was against the law.

Pratkanis said his research group was developing tools to help the
elderly defend themselves against fraudulent pitches.

U.S. Postal Service inspector Zane Hill said scam artists know that
many elderly people feel isolated and a telephone call from anyone is
welcomed.

"Experienced con artists understand elderly citizens' vulnerabilities
and know what buttons to push when they have them on the telephone,"
he said. ((CONGRESS-SCAMS, editing by Americas Desk; Washington
Newsroom, 202 898 8300)

Copyright 2005 Reuters Limited.

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