Federal Trade
Commission
Scams Targeting Seniors
Todd M. Kossow
Assistant Director, Midwest Region
Federal Trade Commission
FTC For The Consumer www.ftc.gov
Background on FTC
• Nation’s general jurisdiction consumer
protection agency
• Oldest independent agency of the federal
government
• Five Commissioners appointed by the
President
• About 1000 staff in Washington, D.C. and
eight regional offices
FTC For The Consumer www.ftc.gov
FTC – What We Do
• Enforcement through federal district
court and administrative litigation
– Exclusively civil, not criminal, jurisdiction
• Maintain the Consumer Sentinel
Network complaint database
• Perform outreach and education
FTC For The Consumer www.ftc.gov
FTC’s Consumer Sentinel
Network
• Database of millions of consumer fraud and ID
theft complaints maintained by the FTC
• Number of Third Party Contributors, including
the BBB and a number of state AG’s
• In 2014, received more than 1.5 million fraud
complaints, reporting losses of more than $1.7
billion; median amount paid was $498
• FTC acts as clearinghouse, making complaints
available to law enforcement around the world
FTC For The Consumer www.ftc.gov
FTC National Fraud Survey
• 2011 Fraud Survey showed that 10.8%
of the entire adult population in U.S.
were fraud victims – an estimated 25.6
million people
• Less than 10% of victimized
consumers complain to a third party
FTC For The Consumer www.ftc.gov
Mass Marketing Fraud – Going
Global
• Victim and scammer never meet
• Connect by phone, email, internet, mail
• Consumers may have no idea who they’re
dealing with or where they are
• To get consumers’ money, they use
anonymous payment mechanisms like a
money transfer or a GreenDot MoneyPak
FTC For The Consumer www.ftc.gov
What Would You Do . . .
FTC For The Consumer www.ftc.gov
Money Transfers
• Via Western Union or MoneyGram
– Can be useful when sending money
to someone you know and trust
– Are inappropriate when dealing with
strangers
FTC For The Consumer www.ftc.gov
Why Money Transfers?
• Wiring money is like SENDING CASH
– Can be picked up within minutes at multiple locations
– Can be sent anywhere in the world
– Cannot reverse or charge back the transaction once
it’s been picked up
– Difficult to trace/identify the recipient
FTC For The Consumer www.ftc.gov
Money Transfer Complaints
• Consumer Sentinel Data 2009-2014
– 2009: 17,167 complaints, nearly $120 million in
reported consumer losses
– 2011: 115,901 complaints; nearly $440 million in
reported consumer losses
• MoneyGram and Western Union complaints now
included
– 2014: 106,472 complaints; over $500 million in
reported consumer losses
FTC For The Consumer www.ftc.gov
FTC For The Consumer www.ftc.gov
FTC For The Consumer www.ftc.gov
Reloadable Debit Cards
• Green Dot cards are reloadable debit cards sold
in stores like Wal-Mart.
• MoneyPaks are advertised as a safe and secure
way to send money – e.g., to reload prepaid
cards, add money to PayPal accounts, or make
payments to major companies.
• Also work like cash, allowing consumers to shop
online without providing credit card or bank
account information.
FTC For The Consumer www.ftc.gov
Green Dot MoneyPaks and Similar
Reloadable Products
• They are NOT:
– Credit cards – no chargeback rights
– Paper checks – cannot be traced to recipient
accounts
– Debit cards – no fraud insurance
– NO REFUNDS!
FTC For The Consumer www.ftc.gov
Green Dot MoneyPaks and Similar
Reloadable Products
• Exercise caution in using a Green Dot
MoneyPak to pay an unfamiliar company or
individual, particularly for Internet purchases.
• Anyone who requires an upfront payment with a
Green Dot MoneyPak or similar product is likely
operating a scam.
• Wal-Mart recently stopped selling MoneyPaks
• Have been used extensively for Jamaican
lottery scams
FTC For The Consumer www.ftc.gov
Types of Advance Payment Scams
• “You’ve Won!” Scams
• Employment Scams (Mystery Shopper
and Car Wrap)
• Rental Scams
• Nanny or Caregiver Scam
FTC For The Consumer www.ftc.gov
“You’ve Won!” Scams
• You’re the “BIG WINNER!”
– A call
– An e-mail
– A card in the mail
• You’ve won:
–
–
–
–
A prize
A sweepstakes
The lottery
A trip, car, television
• But wait... There’s more!
– Before you can claim your winnings,
you need to send money to pay for:
•
•
•
Fees
Taxes
Customs duties
FTC For The Consumer www.ftc.gov
Lottery
Investment
Board
“You’ve Won!” Scams
• Hit older consumers disproportionately
• Play on your emotions – how the money can
help family/friends
FTC For The Consumer www.ftc.gov
Counterfeit Checks
• “You’ve Won!” mailing includes a check to
cover fees associated with your winnings.
• Your instructions are to deposit the check
and use the funds to pay the fees via a
money transfer.
FTC For The Consumer www.ftc.gov
Counterfeit Checks
• The check looks real but it’s a fake!
• Banks are required by law to make funds
available within a few days of your deposit.
• When the check bounces, you will likely end
up owing the bank the money you withdrew.
FTC For The Consumer www.ftc.gov
FTC For The Consumer www.ftc.gov
Universal Information Services
• Defendants sent mailings all over the
world telling people they had won $2.7
million and needed to send $20
• Collected more than $12 million over
several years
• FTC action ended the scam
FTC For The Consumer www.ftc.gov
Mail Tree
• In May 2015, FTC sued Florida operation
that took in more than $28 million from
consumers in several countries
• Letters touted “guaranteed” prizes of more
than $2 million
• FTC action ended the scam
• Defendants have been indicted
• Still many similar scams operating
FTC For The Consumer www.ftc.gov
Mystery Shopper Scams
• You are hired to be a mystery shopper
and asked to evaluate a wire transfer
company’s customer service. You get
a check to deposit in your personal
account. All you have to do is withdraw
the amount of the check in cash and
wire it using the money transfer
service you are evaluating…
FTC For The Consumer www.ftc.gov
Mystery Shopping – Counterfeit
Check
FTC For The Consumer www.ftc.gov
Car Wrap Scams
• Get solicited to have your car shrink
wrapped with ads for Red Bull or
Monster Energy
• Receive a fake check to compensate
you and pay for the wrapping
FTC For The Consumer www.ftc.gov
Rental Scams
• Two types:
– Scammer agrees to rent something
you’ve advertised; provides a fake check
for the deposit, and then changes mind
and wants the deposit back
– Scammer posts potential rental units
online with beautiful pictures; asks
consumers to wire their deposit sight
unseen
FTC For The Consumer www.ftc.gov
Nanny or Caregiver Scam
• Nannies and caregivers listed on sites
like Care.com or sittercity.com are
contacted by scam artists and offered
employment by someone moving to
their area
• Receive a fake check with instructions
to purchase medical equipment or
supplies before the patient arrives
FTC For The Consumer www.ftc.gov
Other Scams Targeting Seniors
• Imposter Scams
– Grandparent or Friend-in-Need Scam
– IRS Imposter Scams
•
•
•
•
Health Care Scams
Medical Alert Robocalls
Tech Support Scams
Charity Frauds
FTC For The Consumer www.ftc.gov
Imposter Scams
• What are they?
– You get a telephone call or email from
somebody pretending to be someone else
– It could be from:
• A “government official”
• Someone you know – a grandchild, other relative, or
friend
• Someone you met online
• What do they want?
– Whatever the story, they always want your
money
FTC For The Consumer www.ftc.gov
Imposter Scams
• In 2014, the FTC received 276,662
complaints about imposter scams,
which was 11% of all complaints
received.
• Third highest complaint category
overall – first time in the top three
FTC For The Consumer www.ftc.gov
Grandparent Scams
•
•
•
•
Pretends to be a grandchild or other family member
Hi Grandma, it’s me. I need help!
In trouble in another country
I’m in England studying for my
semester abroad, but I got in some
“Please don’t tell mom or dad” trouble. Can you please send me
some money to help bail me out?
Injured in car crash;
Please don’t tell mom or dad. They’ll
be mad, and they won’t let me come
arrested and in jail
back!
• Need money immediately!
• Send the money by
Western Union or MoneyGram
• If you send some money, they’ll want more
FTC For The Consumer www.ftc.gov
Grandparent Scams
• How big is the problem?
– 2012: 11,793 complaints. Reported losses of $18 million.
– 2013: 12,400 complaints.
– 2014: 14,521 complaints.
• A lot of call centers—called “boiler rooms”—are in
Montreal, Canada.
• Difficult to find perpetrators.
• Royal Canadian Mounted Police have busted
several boiler rooms.
• Perpetrators have been extradited to the U.S.
FTC For The Consumer www.ftc.gov
Friend-in-Need/Family
Emergency
• You get an e-mail out of the blue from someone
who claims to be your friend or family member in
dire need of help.
• All you have to do is wire money right away and
keep it confidential…
• May be hacking into contacts on smart phones or
into gmail; yahoo mail accounts
FTC For The Consumer www.ftc.gov
IRS Imposter Scams
• Pretends to be with the IRS or another
government agency; caller ID may show
202 number and IRS
• Claims that there will be severe
consequences unless you pay taxes you
owe right now
• You’re told to wire the money or put it on a
prepaid debit card
• Over 52,000 complaints in 2014 and about
45,000 in first six months of 2015
FTC For The Consumer www.ftc.gov
Health Care Scams
• You might get (or see)
– A TV ad
– An e-mail
– A phone call
• They say you need...
– A new Medicare card
– A new health insurance card
– Discounted health insurance
• You must “act now!”
– Threaten you’ll lose Medicare or Social Security benefits.
– You won’t be covered.
– You’ll have to pay full-price for prescription drugs.
FTC For The Consumer www.ftc.gov
AFD Medical Advisors
• Called seniors in the U.S. from Montreal,
Canada
• “Updating” information so you could retain
Medicare benefits
• Took $300 directly from your bank account
• Sent a worthless prescription drug discount
card
• Out of business and operators under federal
indictment
FTC For The Consumer www.ftc.gov
Medical Alert Robocalls
• “John from the Shipping Dept” robocalls:
Someone already ordered this for you and
we just need to confirm shipping details
• Tell seniors it’s “free,” but later disclose
monthly monitoring fee
FTC For The Consumer www.ftc.gov
Tech Support Scams
• Claim that something is wrong with your computer,
but “we’ll help you fix it.”
– May be through a phone call or pop-up window
• Caller tries to get remote access to your computer
for the purpose of fixing a problem that doesn’t
exist; may even install malware on your computer
• Want you to pay for “security” or “technical support”
programs you don’t need; they ask for your account
information so you can pay
FTC For The Consumer www.ftc.gov
Avoiding Tech Support Scams
• If you get a call like this, hang up and call your computer
support company yourself on a number you know to be
genuine
• Don’t give control of your computer to a third party who calls
you out of the blue
• Don’t rely on caller ID alone to determine who is calling
• Never provide financial account information to someone who
calls you and claims to be from tech support
• Don’t give out your computer passwords to someone who
calls you on the phone
FTC For The Consumer www.ftc.gov
Charity Fraud
• How it works:
– Someone contacts you asking for a donation to their charity. I
sounds like a group you’ve heard of, it seems real, and you want
to help.
– They might “thank you” for your prior pledge, creating the
impression you’ve dealt with them in the past.
• What’s legitimate and what’s a scam?
– Scammers want your money quickly. They pressure you to
donate now! (They might ask for cash or a wire transfer.)
– Scammers often refuse to send you information, give you details,
or tell you how the money will be used
• What you can do:
– Take your time! Ask for information. Check them out.
FTC For The Consumer www.ftc.gov
Cancer Fund of America
• In May 2015, FTC and all 50 states sued four sham
cancer charities, charging they bilked more than
$187 million from consumers.
• Alleged that less than 3% of donor contributions
were spent on goods or services for cancer patients
in the U.S.
• Most of the money was spent by the sham charities
supporting themselves, as well as the families and
friends of the operators; money spent on things like
luxury cruises, jet ski outings, and sporting event
and concert tickets.
FTC For The Consumer www.ftc.gov
Tips for victims: If you’ve wired money
to a scammer…
• Call MoneyGram or
Western Union ASAP to
report the fraud and ask
for the transfer to be
stopped
• Call MoneyGram and
Western Union even if the
transaction can’t be
stopped
AND…
FTC For The Consumer www.ftc.gov
Complain to the FTC
• To file a complaint
– www.ftc.gov/compl
aint
– Toll-Free Hotline
1-877-FTC-HELP
(1-877-382-4357)
*English and
Spanish
FTC For The Consumer www.ftc.gov
...Pass it ON
• Start a conversation.
• Share what you know, your strategies, your ideas.
• Get more information at ftc.gov/PassItOn.
Order
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visiting ftc.gov/bulkorder.
Order as many as you need! Available in
English and Spanish.
FTC For The Consumer www.ftc.gov
Federal Trade
Commission
Questions??
Todd M. Kossow
312-960-5616
tkossow@ftc.gov
FTC For The Consumer www.ftc.gov