Every year Americans lose several billion dollars to telemarketing scams. You'd think that if you fell victim once, you'd be less likely to fall for future schemes. But nothing could be farther from the truth.
Con artists often target the same people over and over again -- with startling success. It's called "reloading." Fraudulent telemarketers have learned that only 10 percent of the population will respond to a conniving cold call. But eighty percent of people who've been victimized before will fall for it again.
Every week Deanna A. received reams of junk mail -- enough come-ons to fill a garbage bag. Foreign lotteries to enter, sweepstakes prizes to claim.
She began sending small checks, thinking it would increase her chances of winning. Soon she had spent $1,500. She didn't know that foreign lotteries are usually fake, plus they're illegal in the United States. She didn't understand that legitimate sweepstakes have to let you enter for free.
Deanna didn't win a thing. But the con artists did. They got her money, but more important, they got her name. Crooks often start with junk mail because it's a cheap way to identify a soft target. Then they start calling.
One man called Deanna morning, noon and night. He told her she was on the verge of winning $31 million. Deanna's Hungarian family endured terrible times in the 1940s, between the Nazis and the communists. She allowed herself to dream of a better life now. She told the telemarketer he could charge $12.99 to her credit card. He charged $1,299 instead. At last, she swore off sweepstakes and lotteries.
But then Deanna received a different kind of call. A soft-spoken man called and claimed he was with a law firm. He said he understood a telemarketer had victimized her and his firm could help. The man called back and said he had negotiated a settlement for Deanna: $110,000 in compensation because she was cheated by the lottery and sweepstakes industry. He explained that she would just have to send a check for $3,000 to cover the taxes on her settlement. Deanna did it.
Next, he made the excuse that he needed $11,000 in order to get Deanna's settlement through customs. The 75-year-old woman cashed in a CD, got a cash advance on her credit card and sent the money.
It was the classic reloading scheme. The original con artist has an associate pose as a lawyer or law enforcement agent who can help the victim. Deanna lost $17,000 in all -- her life savings.
FBI investigators say some reloaders make as much as $500,000 a year. Unfortunately, many are based in Canada. Our neighbor to the north has looser laws.
But the FBI and Canadian authorities are working together to short-circuit reloaders. Not long ago, investigators infiltrated a reloading operation by pretending to sell a device that would save the telemarketers money. They've also had some success operating reverse boiler rooms, where volunteers call likely victims and warn them about reloading.
1. Don't respond to sweepstakes and lottery offers you receive in the mail.
2. If somebody tries to sell you something over the phone (scammers ignore the do-not-call list), refuse to be rushed. Ask questions and request written information.