March 29, 2011 -- A growing number of scam artists who target senior citizens have stolen thousands of dollars from victims in what is known as the "grandparent scam," officials say.
The con is within a category of "impostor scams" for which there were 60,000 complaints last year, according to the Federal Trade Commission. And officials have urged the public to report the scams to law enforcement.
Jim and his wife of Wilmington, N.C., for example, received a call last month from a man saying he was their grandson.
The man said he had been in a car accident while traveling in the Dominican Republic. After explaining his injuries and that he badly needed money to get out of jail and return to the United States, the man begged Jim, 78, not to tell his "parents" and blamed his voice change on the accident.
"'Con man' is short for confidence man," Steve Baker, director of the FTC's Midwest region, said. "Their expertise is gaining your confidence."
Jim, who asked ABC News not to publish his last name, worried about his grandson's safety and health, followed the man's instructions and wired him several installments totaling $7,200 through Western Union. He and his wife had not spoken to their several grandsons in weeks, all of whom live out of state.
Jim learned he was the victim of an imposter scam when he called his son after a day to check up on him, and the grandson was fine at home.
"I obviously felt terrible about it," Jim said. "My first reaction was I felt stupid. I can think of 1,000 questions that would have stopped it."
North Carolina Attorney General Roy Cooper's Consumer Protection Division has seen a spike in the grandparent scam targeting the elderly in North Carolina. From Jan. 20 to March. 17, the office received 12 complaints from people ranging in ages from 72 to 88 targeted by scammers posing as their grandchildren or other family members.
The scammers stole from $1,200 to $25,549 from each individual, with a total loss of $129,889 in the period.
Three Common Misconceptions About Grandparent Scams
Jim said his wife answered the phone, asking which grandson he was, to which the imposter said, "Grandma, which grandson do you think it is?"
Jim said she gave one of the names of their several grandsons, to which the imposter answered affirmatively.
Jim said his real grandson felt "terrible" after learning what happened, despite not doing anything wrong.
"My first instinct was that they got the information from his Facebook page or something," Jim said. "But the truth is they got all the information they needed from us."
Thomas Calcagni, acting director of the New Jersey division of consumer affairs, said grandparent scam victims in the state lost an average of $3,500 in 2010.
Calcagni, the New Jersey Office of the Attorney General and the Consumer Federation of America launched a nationwide campaign last week to combat the grandparent scam, offering tips to combat the crime. Among the suggestions: Always confirm the emergency situation with a family member and remember that money that is wired is almost never retrievable.
"The grandparent scam is not a new one," Calcagni said. "Like many crimes of persuasion, it has been around many years. But with the resurgence of the Internet, we've seen more numbers of cases."
The FTC's Baker said it's not only social network sites but obituaries, for instance, that also reveal intimate details for the scammers.
"Say you see an obituary and read that someone is survived by 'grandson Nick in Phoenix,'" Baker said. "Or you can find Nick's Facebook page where he has talked about his grandparent's names. With Internet searches, they are armed with lots of information."
The Federal Trade Commission said that complaints of "impostor scams" have been growing for several years and was the sixth most frequent FTC complaint last year, breaking into the top-10 list for the first time.
Baker estimated that 20 percent of impostor scam victims never file complaints because they are ashamed or embarrassed that they have been duped.
But Baker said the three largest misconceptions of grandparent scam, or any impostor scam, are the "it could never happen to me" mentality, that these scams are rare and that they only happen to dumb people.
Officials Urge Victims to File Complaints to Catch Perpetrators
"They are generous and caring, not dumb," Baker said.
Victims of imposter scams are urged to call their individual state consumer protection divisions and the Federal Trade Commission at (877) FTC-Help or visit the website FTC.gov. The FTC is also hosting a conference on May 2-3 about fraud scams in Chicago that is open to the public, in conjunction with wire-transfer companies Western Union and MoneyGram.
Benjamin Horack of Charlotte, N.C., 93, was also the victim of a grandparent scam in June 2009, wiring $3,000 to someone whom he believed was his grandson in trouble, plus $300 in fees to MoneyGram.
After Horack learned it was a scam, he said he felt "stupid" but soon decided to take action.
Horack, a retired attorney, and his law firm, Horack Talley, sent a letter to MoneyGram, threatening to sue or file a class-action lawsuit and alleging how the company was at fault for allowing him to send money to an impostor.
MoneyGram eventually refunded the money to Horack after about six months, he said.
"I stamped my feet, being a lawyer, and worked through my office," said Horack, who has alerted his retirement community in Charlotte to the scam.
"They get all your guards down," Horack said of the scam artists. "As I say, they're virtuous. You have to admire them but I hope every one of them go to hell."
Jim, in Wilmington, N.C., said he thought God was teaching him a positive lesson from the scam experience, realizing he was valuing money "more than I should have."
He hopes he can prevent others from falling victim to the scam.
"It was like getting hit with a tuba between the eyes," Jim said. "As embarrassed as I was, can you imagine if it was someone's last $7,000?"