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Elderly Americans Lose Millions to Internet Scams
Reuters
July 28, 2005
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, 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.
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