The latest scam targeting older consumers is particularly cruel, because it homes in on people who already have lost money in previous fraudulent schemes.
So-called asset-recovery firms target people who have lost money in another type of fraud – often, a bogus work-at-home scheme or a fake time share investment, according to an advisory issued this week by the Consumer Financial Protection Bureau.
The firm promises the victims that it can recover much of the lost money, for a hefty upfront fee. But after taking the payment, the firm does little – or takes steps that the consumers could do on their own at no cost.
Criminals are creative and are constantly coming up with new ways to scam older adults.
Maggie Flowers, associate director for economic security with the National Council on Aging
Stacy Canan, deputy assistant director of the bureau’s Office for Older Americans, said the agency became aware of the problem after noticing an increase in complaints filed online not by consumer victims, but by asset-recovery companies – apparently, as part of the “service” the firms were supposed to be providing. (There is never any fee to file a complaint with the agency, she noted.)
When the bureau followed up with some of the consumers, they didn’t know a complaint had been filed with the bureau on their behalf, and told similar stories about being contacted by a firm offering to help them recover lost funds. Consumers generally reported paying a few hundred dollars, but some paid $1,000 or more. Many of the complaints originated with a company in Florida, but the victims came from multiple states.
“It’s a nationwide issue,” Canan said. The bureau identified more than 400 complaints.
The Federal Trade Commission took action last October to shut down an asset-recovery firm in Florida that had duped consumers who had previously lost money on fraudulent investments in time shares or precious metals.
It’s not clear how the operators of these firms identify consumers who have been previous victims.
But Amy Nofziger, director of regional operations with the AARP Foundation and manager of its Fraud Watch Network call center, said criminals often re-targeted the same victims, having had success the first time. Criminals, she said, also maintain and sell lists – the FTC calls them “sucker lists” – of people who have been previously tricked.
“They’re re-scamming that same victim,” she said.
Consumers may feel embarrassed that they were duped out of their money, she said, so may be susceptible to offers of getting their funds back.
Maggie Flowers, associate director for economic security with the National Council on Aging, said older people were often targeted for fraud because they are perceived as having money, even if it is just a monthly Social Security check.
“Criminals are creative,” she said, “and are constantly coming up with new ways to scam older adults.”
Here are some questions and answers about avoiding telemarketing fraud:
What should I do if I receive a phone call offering to recover money?
“Hang up the phone,” Nofziger said, and contact the consumer regulator in your state. The Fraud Watch Network’s website contains links to relevant state authorities.
Flowers said older people should always ask for information in writing if they receive offers for services over the phone, and discuss it with a trusted family member or friend before taking any action.
What if I have paid a fraudulent recovery firm?
The Consumer Financial Protection Bureau advises that if you used a credit or debit card to pay the company, contact your bank immediately to explain the situation and prevent further charges. If you paid by credit card and notify the issuing bank within 60 days, you may be able to dispute the charge.
You should also contact local law enforcement and file a complaint online with the Federal Trade Commission.
Is the income tax telephone swindle still active?
Yes, and callers are becoming more aggressive now that it’s tax season, Nofziger said. The swindle involves calls from people purporting to be Internal Revenue Service agents threatening to arrest or deport consumers if they don’t immediately pay taxes they supposedly owe. Consumers should know that the IRS will not call and threaten people, she said, and if you have an actual tax issue with the agency, you’ll get a formal notice by mail first.
“Don’t be fooled by callers pretending to be from the IRS in an attempt to steal your money,” John Koskinen, commissioner of the IRS, said in a prepared statement. “We continue to say if you are surprised to be hearing from us, then you’re not hearing from us.”