The woman was quite old and very confused.
She walked into the Department of Motor Vehicles in Payson clutching a signed personal check and a "final claim notice" telling her that she'd won a cash prize of $4,897.79 or one of five other "fabulous" prizes actually worth less than $5 each and all she'd have to do in order to become a winner was to remit a check for $14.97. She came to the DMV to collect.
The clerk read the letter and told her to destroy it, along with the check the woman had written.
Older Americans, you see, have become the primary targets for a new kind of criminal the kind that holds you up in your own home, but not with a gun. This criminal's weapons of choice are direct mail and the telephone.
"You may already be a winner"
It happens every day. Thousands of people, most of whom are not at all confused, are thrilled to be notified by mail that they have won a free prize. Usually, it's a postcard or computerized "personal" letter that says like the Payson woman's notice your prize will be one of four or five "valuable" items. But typically, according to the American Association for Retired Persons, these notices are mailed by con artists whose sole purpose is to rip you off.
If you contact the company by phone, as the postcard will tell you to do, your "free" prize could end up costing you hundreds of dollars. The following examples, culled from AARP's Web site, illustrate the point.
A man in San Mateo, Calif., paid $398 for "shipping charges" to receive a "free" 1988 Pontiac automobile. Needless to say, he got nothing. A Bergen County, N.J., resident paid a $69 "shipping and handling charge" to get his "free" $1,000 savings bond (with a maturity of some 30 years). He could have bought the same bond from the U.S. Government for only $50.
Often you never get a prize. If you do get one, it typically is an inferior, overpriced, or grossly misrepresented piece of merchandise. For example, an "all-terrain vehicle" turned out to be a lawn chair with wheels, a "sport fishing boat" was an inflatable raft, and a "genuine fur coat" was a dyed rabbit pelt worth about $30. Beware if the notice lists nice-sounding prizes like "designer" or "diamond" watches. They are likely to be cheap or practically worthless junk.
Commonly, the victims of these scams are required to pay for their "free" item, either by requiring you to order merchandise or by charging shipping and handling fees, or processing fees. The fees required to get the prize often exceed the true monetary value of the prize itself. And the merchandise you are required to buy is often grossly overpriced, as has been the case with the vitamins and the water filters and purifiers that have been marketed to recent lucky "winners."
"These direct mail sweepstakes and contest aren't just misleading, they are scams," Secretary of State Betsey Bayless said.
Dial F for fraud
An identical scheme along with many others is often perpetrated by unscrupulous telemarketers.
There may be more than 10,000 fraudulent telemarketing operations calling hundreds of thousands of American consumers every day. Older Americans are a prime target of these crooks, too.
The U.S. Department of Justice estimates that one out of six consumers is cheated by telemarketing criminals every year. In one case, the FBI found that fraudulent telemarketers were directing nearly 80 percent of their calls at older consumers.
Congress estimates that telemarketing crime cost American consumers more than $40 billion. That's enough to pay for the nursing home care of more than a million older Americans for an entire year.
Telemarketing operations, known as "boiler rooms," are staffed by high pressure sales people armed with sophisticated selling techniques designed to get you to send them money. Virtually every agency which monitors their activities warn consumers to not be swayed by their carefully scripted sales pitches and pressure tactics.
Many of the older people preyed upon by dishonest telemarketing companies are well-educated, with above-average incomes, and they are socially active in their communities.
Therefore, the sales pitches these companies use are appropriately sophisticated. In addition to phony prizes and sweepstakes, they include sham investments, crooked charities, useless water purifiers, credit cards "regardless of your credit history," credit repair, and "recovery rooms" where victims are scammed again by telemarketers with promises that, for a fee, they will help them recover the money they have already lost.
At this time of year in Payson, Lt. Don Engler of the Payson Police Department said, "the scams that bother us the most are those where the caller says he's raising money for the local police department. When we get a report on one of those, we first try to verify if these people are misrepresenting themselves ... and almost always, we find that they are."
Connie Copeland, director of business services for the Arizona Secretary of State's office, said that fake charities are a major component of the telemarketing problem.
"This is usually the time of year when we get the most questions about these charities that call to solicit funding, and we do find that many are illegitimate," she said.
Copeland suggested that anyone who is contacted by a suspicious-sounding donation-monger should proceed directly to the Secretary of State's Web site SOSAZ.com where they can research every charity operating within the state, as well as their record of complaints and the percentage of donations that go into the program they're promoting rather than in their own pockets.
Telemarketing organizations that are registered to operate in Arizona a state law can be checked out at the Web site, too, Copeland said. A company's address, phone number and other information accompanies every entry.
But just because they may indeed be registered, Copeland warned, "Does not mean the company is legit. It only means they have complied with Arizona law in terms of registration requirements."
The good news in Arizona, at least is that the Secretary of State's office, along with the office of the attorney general, has for the past three years focused on toughening the telemarketing laws in Arizona.
"In 1997, when (Secretary of State Bayless) took office, she asked for the files on all telemarketers, and in the entire state there were only four registered, and of those four, there were two that were exempt," Copeland said. "Now almost all of them, about 67,000, are registered. Our Web site can tell you who they are, where they are calling from, what their record is.
"(Telemarketing organizations) are required to keep a physical, updated 'no call' list. If you tell them not to call you again, they are required by law to not call you again. If they do, you need to report them to us, and we in turn report them to the Arizona Attorney General's office."
Copeland admits that she does not have much patience with telemarketers who break the rules.
"I had a day off from work six or seven months ago, and during that day I received 20 telemarketing calls. So I know how annoying it is," she said.
Phone scam of the year
According to the Better Business Bureau of Central/Northern Arizona, the most popular telephone scam of the year a return of the "809" area code rip-off that originated in 1996 does not necessarily involve telemarketers.
The scam works this way: An urgent message is left on answering machines, e-mails or pagers saying that someone close to the receiver has been arrested or died, or that the receiver has won a wonderful prize or has been offered a great job. When the call is returned, expensive international charges apply that can be as much as $25 per minute or more.
The Better Business Bureau recommends that no matter how potential victims of this scheme are approached, do not respond to any request to dial an 809 area code.
How to protect yourself from mail, phone scams
The next time you get a computerized "personal" letter telling you it is "your lucky day," keep these points in mind:
Do not be deceived by letters that look official or urgent. Some contest promoters use names that resemble official organizations, such as the lottery or a parcel delivery service, or use an envelope that looks like it contains a telegram or government check.
Read the letter carefully. In some cases, the letter may tell you the cash value of each prize or that you must attend a sales seminar as part of the contest. The fine print may be especially informative.
Think carefully before you attend the sales meeting for the sole purpose of winning an expensive prize. Your chances of winning a truly valuable prize are likely to be very slim. You also may be required to pay a handling charge that is equivalent to the value of your prize. Ask about any such charges before you attend any presentation or pay a charge.
Be cautious of contest promoters who use "900" numbers. You may call a free "800" number which then directs you to dial a "900" number. You pay for "900" number calls, of course, and the charges may be high.
Think carefully before sending a check to contest promotion companies. If a company urges you to use delivery systems other than the U.S. Postal Service, such as overnight or courier services, the company may be trying to avoid detection and prosecution by postal authorities.
Be cautious about disclosing your credit card number over the phone unless you know you are dealing with a reputable company.
Call your state or local consumer protection office to inquire about the seller's reputation. Be wary of offers that claim to be for a "limited time" only and efforts to make you "buy on the spot." Although some state laws provide cancellation periods under certain circumstances, you should not count on being able to cancel and get your money back unless your right to do so is clearly spelled out in your contract.
Before signing any contract, make sure you read it carefully. If the salesperson makes claims that are not in the contract, remember, it is the contract that counts.
Protect yourself from becoming the victim of telemarketing fraud by remembering the following tip-offs from AARP, which will help you decide whether to deal with the promoter.
The offer sounds too good to be true. An unbelievable-sounding deal probably is not true.
High-pressure sales tactics. A swindler often refuses to take no for an answer; he has a sensible-sounding answer for your every hesitation, inquiry, or objection.
Insistence on an immediate decision. Swindlers often say you must make a decision "right now," and they usually give a reason, like, "The offer will expire soon."
Your credit card number is requested for verification. Do not provide your credit card number (or even just its expiration date) if you are not making a purchase, even if you are asked for it for "identification" or "verification" purposes, or to prove "eligibility" for the offer. If you give your card number, the swindler may make unauthorized charges to your account, even if you decide not to buy anything. Once that is done, it may be very hard to get your money back.
You are urged to provide money quickly. A crook may try to impress upon you the urgency of making an immediate decision by offering to send a delivery service to your home or office to pick up your check. This may be to get your money before you have a chance to think carefully about the offer and change your mind, or to avoid the possibility of mail fraud charges in the future.
There is no risk. All investments have some risk, except for U.S. Government obligations. And if you are dealing with a swindler, any "money-back guarantee" he makes will simply not be honored.
You are given no detailed written information. If you must send money or provide a credit card number before the telemarketer gives you the details in writing, be skeptical. Do not accept excuses such as, "It's such a new offer we don't have any written materials yet," or "You'll get written information after you pay."
You are asked to trust the telemarketer. A swindler, unable to get you to take the bait with all of his other gimmicks, may ask you to "trust" him. Be careful about trusting a stranger you talk to on the phone.
You are told you have won a prize, but you must pay for something before you can receive it. This payment can either be a requirement to purchase a minimum order of cleaning supplies or vitamins, or it can be a shipping/handling charge or a processing fee.
If you have been bilked in a telemarketing scheme in which the U.S. Mail was used, or if you know about a scheme that should be investigated, inform your local postmaster or nearest Postal Inspector.
How to file a complaint
Always try to resolve complaints with the company first, advises the AARP. If that does not work and you believe you have been defrauded, contact your local consumer protection agency, the office of the Arizona Secretary of State (602-542-4285), the Better Business Bureau of Central-Northern Arizona (toll free at 877-291-6222), or Call For Action (202/537-0585; TDD 202/537-1551) to report the company.
You also may file a complaint with the FTC by writing to: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580.
The FTC has a series of Facts for Consumers that explains fraudulent sales practices, precautions you can take to avoid becoming a victim, and your rights under federal credit protection laws. These and other brochures are listed in the FTC's Best Sellers for Consumers. To obtain a free copy, write to: Public Reference, Federal Trade Commission, Washington, D.C. 20580.