Lead Generation Techniques Used
by Con Artists for Direct Mail Fraud and Telemarketing Scams
Target Marketing
of Fraud Victims
Victims are not created at random or by accident. They are chosen
by the offenders because they are vulnerable in some way and because
they have enough money or assets to be attractive. Victim selection
can be done directly by researching specific information about
you.
Anyone with a phone can be victimized by telemarketing scam artists.
Telephone fraud knows no race, ethnic, gender, age, education or
income barriers. Fronters will sometimes seek out leads using community
books and directories which list former occupations. They will
also "cherry pick" elderly-sounding names from the phone
book like Edna, Violet or Gertrude.
Cold Calls
You may get a call from a stranger who got your number from a
telephone directory, mailing list, or "sucker list." The
latter refers to lists of consumers who have lost money through
fraudulent prize promotions or merchandise sales. These lists contain
names, addresses, phone numbers, and other information, such as
how much money was spent by people who have responded to telemarketing
solicitations. "Sucker lists" are bought and sold by
unscrupulous promoters and "list brokers". They are invaluable
to scam artists who know that consumers who have been deceived
once are vulnerable to additional scams.
Telephones create economies of scale by allowing a single caller
to target a large number of victims in a short time and at long
distances. Offenders maximize proceeds by focusing on target-groups
most easily victimized, and by making large numbers of calls quickly,
focusing on those who appear susceptible and hanging up on those
who resist. Fraudulent telemarketers and sellers may reach you
in several ways, but the telephone always plays an important role.
You may not know it, but if you get frequent hang-up calls, they
are probably telemarketers. In order for them to have the maximum
number of calls each hour, they dial ahead. They are on a call,
but they are dialing the next two calls. If the current call stays
on the phone longer, the future call goes to your house, but when
you pick up, it hangs up. Then, when they get done with the current
call, they call you back. Even if you have caller ID, it will say "no
data sent", as they use blocking features.
Some people have had their phone numbers changed because they
thought they were being harassed by calls, when the truth is that
it is just telemarketers working it so they will have the greatest
ability to get people to spend money. They are not concerned with
the inconvenience to you or any other discomfort this practice
may cause you.
The majority of these telemarketing calls are being dialed by
a computer known as an auto dialer or predictive dialer. Predictive
dialers can dial 3-5 numbers simultaneously and can make as many
as 500,000 calls between 8 a.m. and 9 p.m.
If you are not home or if the computer gets your answering machine,
your number will be put back in the database to be called again
later.
Direct Mail
You may get a letter or postcard saying you've won a prize or
a contest. Such companies get leads from the bulk mailing of entry
forms with an easy crossword and a $3-5 entry fee or from a "scratch
and win" ticket.
Instructions tell you to respond to the promoter with certain
information. Such leads may get a follow up call because they now
know that you are prone to such gimmicks. You'll be called by a
salesperson who may use persuasive sales pitches, scare tactics,
and exaggerated claims to deceive you and take your money.
When family members of elderly telemarketing fraud victims have
done a search on the internet for some of the names used in the
sweepstakes material, found next to piles of cancelled checks,
they invariably find large corporate list management and sales
firms which purport to be one thing but appear to be another.
It should be considered aiding and abetting a criminal enterprise
when it is determined that commercial list managers purposely compile
and then sell lists of vulnerable victims as part of their business
model.
List categories by these firms are not benignly collected demographic
profiling, based on product interest of everyday goods and services,
but are actively generated campaigns geared, coincidentally, towards
the psychological traits which scammers are seeking in their victims.
List Removal Techniques
and Services
These are some examples of what types of lists are readily available
for purchase.
Donnelley Marketing
5711 S. 86th Circle, Omaha, NE 68137
Datacards.com
compiles lists of people interested in astrology from various other sources
 |
AMERICAN
ASTROLOGY (Formerly: Horoscope Guide) |
|
ASTRAL
RESEARCH CREDIT CARD/TELEPHONE DATABASE |
|
ASTRAL
RESEARCH, INC. |
|
ASTRO
LUCK - ASTROLOGY BUYERS |
|
ASTRO
LUCK - UNITED KINGDOM ASTROLOGY BUYERS |
|
BOSS
COMMUNICATIONS - CANADIAN ASTROLOGICAL PRODUCT BUYERS |
|
CASHORAMA
BUYERS |
|
CLASSIC
PRODUCTIONS |
|
EUROPEAN
PSYCHIC AGENCY (Formerly: Euro-American Astrological Product
Buyers) |
|
FATE
MAGAZINE |
|
HT
PUBLICATIONS - MASTERFILE |
|
LLEWELLYN'S
NEW WORLDS OF MIND AND SPIRIT |
|
MADAME
PETROVKA'S SPECIAL TAROT NUMEROLOGY BUYERS |
|
NATIONAL
ASTROLOGY BUYERS |
|
STARPOWER
ASTROLOGY BUYER |
|
WU
LEE ASTROLOGICAL BUYER |
Credit and Business Opportunity Seeker Lists
|
AMERICAN
COMPUTER INSTITUTE - BUSINESS OPPORTUNITY |
|
AWARDS
ADMINISTRATION - BUYERS |
|
CASH
PRIZE HEADQUARTERS |
|
CREATIVE
MONEY MAKING VENTURES |
|
CREDIT
CARD CONGLOMERATE - NEW CREDIT CARD HOLDERS |
|
CREDIT
QUEST |
|
CREDIT
MARKET BUYERS |
|
FUTURES
INVESTMENT OUTLOOK |
|
HOME
OFFICE OPPORTUNITY SEEKERS |
|
HUNGRY
FOR CREDIT |
|
INSURANCE
INDUSTRY INTERNET NETWORK (IIIN) |
|
ITCH
TO BE RICH BUSINESS OPPORTUNITY PRODUCT BUYERS |
|
JUPITER
MARKETING-TELEPHONE DATABASE |
|
LAS
VEGAS GAMBLERS |
|
M.A.F.
BUYERS |
|
NETWORK
MARKETING GROUP OPPORTUNITY SEEKERS |
|
PROTECT
YOURSELF CREDIT CARD PROTECTION BUYERS |
|
R.J.
PERSSON ENTERPRISES ENHANCED MASTERFILE |
|
2ND
CHANCE CREDIT SEEKERS |
|
STOCK
MARKET MANIA |
|
SUCCESS
MARKETING - OPPORTUNITY BOOKBUYERS |
|
SUCCESS
STORIES CREDIT SEEKERS |
|
SUNSHINE
OPPORTUNITY SEEKERS |
|
TECHNOLOGY
PROFESSIONALS NETWORK-TPN |
|
TNT
BUSINESS OPPORTUNITY RESPONDERS |
|
WEALTH
BUILDING OPPORTUNITY BOOKBUYERS |
|
WORK
AT HOME OPPORTUNISTS |
Sweepstakes and Puzzles Players
|
ALL
AMERICAN SWEEPSTAKES |
|
AMERICAN
SWEEPSTAKES MULTIBUYERS |
|
AWARDS
ADMINISTRATION - BUYERS |
|
BEN
SCOTT SWEEPSTAKES BUYERS |
|
BEN
SCOTT SWEEPSTAKES TELEPHONE/CC DATABASE |
|
BUREAU
OF CASH AWARDS |
|
CASH
AWARDS SWEEPSTAKES |
|
CASH
PRIZE HEADQUARTERS |
|
CASHORAMA
PUZZLE BUYERS |
|
CERTIFIED
CASH NOTIFICATION SWEEPSTAKES BUYERS |
|
CLASSIC
PRODUCTIONS |
|
CONSUMER
ENRICHMENT CENTER UNITED KINGDOM |
|
CONTEST
EXPRESS BUYERS |
|
DOUBLE
DIAMOND SWEEPSTAKES ENTRANTS |
|
GAMES
THE MAGAZINE FOR CREATIVE MINDS AT PLAY |
|
GAMES-WORLD
OF PUZZLES MAGAZINE |
|
JB
SALES MAGAZINE SWEEPSTAKES BUYERS |
|
JUPITER
MARKETING - BUYERS |
|
M.A.F.
BUYERS |
|
MARKHAM
PUBLISHING |
|
NATIONAL
CATALOG SHOPPING |
|
NATIONAL
PRIZE MONITOR / EPI PUZZLE BUYERS |
|
NATIONAL
PRIZE MONITOR / EPI PUZZLE BUYERS - PHONE / CC DATABASE |
|
NATIONWIDE
CLEARINGHOUSE LTD. - CREDIT CARD/TELEPHONE DATABASE |
|
NEW
YORK HERALD TRIBUNE CROSSWORD PUZZLES MAGAZINE |
|
NORTH
AMERICAN AWARD CENTER - CANADIAN ENTRANTS |
|
NORTH
AMERICAN AWARD CENTER PUZZLE ENTRANTS |
|
NSA
SWEEPSTAKES REPORT BUYERS |
|
PACIFIC
COAST PAYOUT BUYERS |
|
PUBLISHERS
EXCHANGE SWEEPS ENTRANTS |
|
PUZZLE
RAMA PLAYERS |
|
RENEW
2000 SWEEPSTAKES |
|
SWEEPS
AND PRIZES SUPERFILE |
|
SWEEPSTAKES
DIRECT CREDIT CARD / TELEPHONE DATABASE |
|
SWEEPSTAKES
MASTERFILE |
|
TIME
SHARE BUYERS |
|
TNT
BUSINESS OPPORTUNITY RESPONDERS |
|
U.S.
SWEEPSTAKES DATABASE |
|
WC
MAGAZINES SWEEPSTAKE BUYERS |
|
WESTPORT
ENTERPRISES |
|
WESTPORT
ENTERPRISES - CANADIAN
|
WALTER KARL DIVISION OF DONNELLEY MARKETING
One Blue Hill Plaza, Pearl River, NY 10965
Phone: (845) 620-0700 Fax: (845) 620-1056
CASHORAMA BUYERS - 102,951 at $85/thousand minimum 5,000
Formerly: Cash O Rama Puzzle Contest Players) CASHORAMA buyers
enter puzzle contests, and register for a chance to win up to $10,000
in cash and prizes. They are competitive men and women who enjoy
completing puzzles and the opportunity for a big "windfall".
$10.00 PER ENTRY
American Donors Database
20,034,343 Households $70/thousand names minimum 5000.
Derived from individual donor files which are used to determine
the type of contribution including Health, Religious, Environmental,
Animal Welfare, Political and other donations. Beyond being able
to select specific causes, a wealth of demographic and psychographic
selections are available to support targeted campaigns.
Selections available include age, sex, date of birth, mail order
buyers, phone number, credit cards.
CYSTIC FIBROSIS FOUNDATION SENIORS
These ACTIVE SENIORS are responsive donors who have contributed
to appeals targeted to finding a cure for this deadly disease that
affects primarily children and young adults. These active 55+ seniors
have ample time and discretionary income to spend on travel and
leisure activities, crafts, reading and more. $70/M selection of
donation levels and sex extra.
Ages 65 - 74 194,117
Ages 75+ 200,771
THE LISTWORKS CORPORATION
1 CAMPUS DRIVE
PLEASANTVILLE, NY, 10570
TEL# (914) 769-7100
FAX# (914) 769-8070
Sells their Cash Claim Sweeps list with the following description:
THESE SWEEPSTAKES ENTHUSIASTS RESPONDED TO A CASH CLAIM NOTIFICATION
FOR THE CHANCE TO WIN A SHARE OF A $50,000 SWEEPSTAKES PACKAGE.
THEY HAVE ALL SPENT $14.95 TO REGISTER FOR THE CASH AND PRIZES.
OVER 60% HAVE INDICATED THEY HAVE AT LEAST ONE MAJOR BANK CREDIT
CARD AND THEY ARE SELECTABLE. TELEPHONE NUMBERS ARE ALSO AVAILABLE.
THE CASH CLAIM SWEEPS LIST IS A MUST TEST FOR ALL PROMOTIONAL
OFFERS INCLUDING SWEEPSTAKES, LOTTERIES, CONTESTS AS WELL AS ASTROLOGICAL,
GENERAL MERCHANDISE, MAGAZINES AND MORE!!!
SOURCE: 100% DIRECT MAIL 70% FEMALE/30% MALE
Buy up to 304,634 12 MONTH BUYERS at $80.00 per thousand with
a minimum order of 5,000.
They also promote:
CONTACT AMERICA's - SWEEPS HAPPY SENIORS
623,903 SENIOR SWEEPS ENTRANTS at $45.00 per thousand names
Age, Gender and Income Breakouts 45% FEMALE, 45% MALE
CONTACT AMERICA HAS IDENTIFIED THE MOST OPPORTUNISTIC "SOMETHING
FOR NOTHING" SENIOR CONSUMERS AVAILABLE. THE ENTRANTS ON THIS
FILE ARE THE EMBODIMENT OF CLASSIC MIDDLE-AMERICAN DREAMERS.
THESE SENIORS DON'T JUST LOOK AT EVERY PIECE OF MAIL THEY RECEIVE,
THEY ABSORB THEM. A MORE READY PROMOTIONALLY ORIENTED PROSPECT
YOU CANNOT FIND. IF YOUR OFFER IS PROMOTIONAL IN NATURE, THESE
SENIORS WILL BE SWEPT AWAY. PHONE NUMBERS ARE AVAILABLE ALSO.
MILLIONAIRE SWEEPSTAKES
140,642 LAST 6 MONTHS $80.00 per thousand names MINIMUM ORDER:
5,000
65% FEMALE/35% MALE - SOURCE: 100% DIRECT MAIL
THESE SWEEPS LOVERS ALL FILLED OUT THE "MILLIONAIRE SWEEPSTAKES" ENTRY
FORM TO BE ELIGIBLE TO WIN $1,625,000. ALL ENTRANTS ARE GUARANTEED
A $1000 BONUS PACKAGE THAT CONSISTS OF DISCOUNTS FOR TRAVEL, CAR
RENTALS, FILM AND ENTERTAINMENT. ABOUT 50% OF THE MILLIONAIRE
SWEEPSTAKES FILE HAVE PAID $7.99 FOR RUSH DELIVERY OF THEIR BONUS
PACKAGE.
THE MILLIONAIRE SWEEPSTAKES ENTRY FORM CONTAINS SEVERAL QUESTIONS
AND THE RESPONSES TO THESE QUESTIONS ARE SELECTABLE. THEY ARE:
DO YOU USE MAJOR CREDIT CARDS? YES-43% NO-57%
DO YOU LIKE TO TRAVEL? YES-41% NO-59%
WOULD YOU LIKE TO RECEIVE MORE SWEEPSTAKES TO ENTER? YES-82% NO-18%
THE MILLIONAIRE SWEEPSTAKES CLUB OFFERS A UNIQUE OPPORTUNITY TO
REACH HIGHLY PROMOTIONAL AND SUPER-RESPONSIVE INDIVIDUALS. THE
FILE IS A NATURAL FOR SWEEPSTAKES, LOTTERIES, PUZZLES, GENERAL
MERCHANDISE, MAGAZINES, TRAVEL AND MORE!!!
Promoted using the following keywords: list, lists, mailing, mailing
lists, brokerage, response driven, internet lists, buyers, infomercial,
phone, append, verify, telematch, tele-match, cas, cass, mailers,
list management, managed lists, enhanced lists, direct mail, fulfillment,
MIS services, service bureau, address correction, merge/purge,
dedupe, de-dupe, ZIP+4, NCOA, area code correction, data conversion,
phone appending, phone verification, credit card status, list updates,
targeted lists, demographic, profiling, credit, health, diet, informercial,
internet buyers, investors, opportunity seekers, psychic, sweepstakes,
puzzles, telemarketing buyers, travel, mail generated, telemarketing
generated, TV generated, informercial generated, space ad generated
internet generated, database generated;
Listdata Computer Services has the following lists available for
sale.
Cash Claim Sweeps, Mad for Sweeps, Millennium Sweeps, Millionaire
Sweepstakes, Puzzle Mania, Sweeps Oriented Buyers, Travel Sweepstakes
Buyers.
Broadcast and Print Advertisements
In some cases, you may make the telephone call in response to
a television, newspaper or magazine ad, or a direct mail solicitation.
The fact that you make the call doesn't mean the business or investment
is legitimate or that you should be less cautious about buying
or investing on the phone. Those who respond by calling a toll-free "800" number
often get a package of materials, followed by high-pressure telephone
sales pitches. Fraud investigators speculate that getting victims
to call first makes the work of the schemer much easier, since
the potential investor has already "bought into" the
scheme by taking the first step.
E-mail
Commonly known as "junk e-mail," "bulk e-mail," or "spam," unsolicited
commercial messages are flooding the Internet each day, ending
up on desktops everywhere. Although some of these messages are
from legitimate marketers, many are fraudulent solicitations from
scam artists who make promises they have no intention of keeping.
Spammers and scammers often hide and confuse their identities
by obscuring their URLs.
To block spam and unsolicited e-mail
messages.
Contest Leads
"Leads" or prospect calling lists, which identify individuals
who have entered a contest by filling out a personal data card,
are often purchased by fraudulent telemarketers from "lead
brokers". The data cards generally contain your name, address,
phone number, and age. Usually you lead them right to you when
you fill out these draw ballots or enter contests at fairs, trade
shows and restaurants.
Gold Dust Memo
From: Director of Marketing
To: Chief Financial Officer
To help limit our advertising budget and sales staff it is important
to target resources where they will be most effective. As an aid
to our marketing efforts, in efficiently selecting prime customers,
it is recommended that we take steps to institute the latest technologies
in data-mining techniques. Data mining can indicate factors that
help determine whether our marketing efforts will succeed.
Consumers can then be the target of increasingly sophisticated
marketing campaigns which seek to address their individual weaknesses.
Through the selected acquisition of established mail order and
publishing enterprises, our activities will be able to generate
relevant data in the normal course of business. Initial studies
have shown some interesting tendencies prevalent to a significant
number of existing customers.
They tend to believe what they see in print, with emphasis on
the exaggerated or unbelievable, as may be found in the tabloid
industry. Such a media acquisition would also reduce advertising
costs. It would also be desirable to acquire the customer lists
of as many infomercial, collectible item business and charities
as possible, to name a few.
Data mining offers the potential to identify the preferences of
specific customer groups and to indicate what sorts of promotional
material most affect their purchasing habits. Similarly, identifying
preferences can be used to effectively target deceptions for that
group.
Unresponsive To Clients' Injunctions
The FTC filed suit (1/19/96) against Marketing Response
Group, Inc. ("MRG") and two
Tampa, Florida-area businessmen -- Peter J. Porcelli,
Jr., and William S. Kilichowski --
and four other companies they operate: Marketing Response
Group and Laser Company, Inc., Service
Bureau International, Inc., Pete-Nik Holdings,
Inc., and Palm Harbor Holdings, Inc.
for allegedly acting with numerous telemarketers nationwide to
defraud consumers with direct mail promotions that falsely promise
quick land sales, guaranteed awards, and free vacations.
According to the FTC, MRG devised the promotions, created the
standard mail pieces, selected the mailing lists, and then printed,
addressed, and mailed the deceptive solicitations on behalf of
its client-telemarketers.
Since at least 1989, the defendants have created, printed and
mailed solicitations containing false representations in connection
with land sales, guaranteed awards, and vacation promotions. They continued
to mail these deceptive solicitations even after the FTC and numerous
states brought telemarketing fraud cases against several of their
clients. (ie. Fitness Express, Passport International, Pioneer
Enterprises, and Nishika Corporation)
Land Sales
Their land sales solicitations allegedly misrepresent that buyers
have contacted them with an interest in purchasing land similar
to that owned by you; that they are qualified to sell real estate;
and that if you call a specified number you can "sell for
cash today." Consumers who call then pay several hundred
dollars, but in most instances, they never sell your property.
Sweepstakes
Awards
Their guaranteed award solicitations falsely represent that you
are "absolutely guaranteed" to receive one of several
valuable awards, such as a car, a vacation, or a cashier's check
for several thousand dollars, and that you will receive the award
without obligation to pay any money.
In fact, when you call to claim your "awards," you find
that you must send several hundred dollars to purchase a product
or to cover shipping and handling costs in order to receive it.
Even then, when you send the money, you often never receive the
promised award.
Vacation
Offers
Their vacation solicitations promised you a vacation with no obligation
to make a purchase or payment when in fact, you must send several
hundred dollars to purchase a travel package and often must pay
even more money to take your vacation.
NOTE: The Commission files a complaint when it
has "reason to believe" that the law has been or is being
violated, and that a proceeding is in the public interest. The
complaint is not a finding or ruling that the defendants have actually
violated the law. The case will be decided by the court.
(Civil Action No. 96-111-CIV-T-17A)
(FTC File No. 922 3003)
Tips To Avoid Having Your Personal
Information Acquired and Used For Scams or Identity Theft
1. Do not play, or let your child play, games or enter contests
at sites which appear on candies, cereal boxes, ads in magazines,
online, etc. as they often require date-of-birth, name, address,
phone, e-mail, etc. for the purposes of processing and awarding.
Their privacy policy and/or terms inevitably contain either an
escape clause (if not a complete lie) allowing the eventual abuse
and/or redirection of any information gathered. The data compiled
may also be assimilated and combined with that obtained from other
sources to complete your personal identity profile.
2. Use extreme caution when putting your credit info on-line.
Instead, consider using a card into which you deposit the amount
of money required for your desired transactions. AAA Everyday Funds
is an example of one such card.
3. Do not give social security number, account number, DOB, etc., out
for ANY reason, if you can help it. While this is often unavoidable
on some legitimate calls, (such as to the IRS, your doctor or
your bank), do it ONLY on calls initiated by you, to numbers obtained,
BY YOU, from the institution or off valid documents you KNOW are
from THEM.
4. Do Not fill out surveys/questionnaires/product registration
optional sections, as they are gathering personal information such
as household income, credit cards possessed, family size, medical
needs, buying habits, etc.
5. When signing up for something on line, registering or
installing software, etc., watch out for and unclick the boxes
that show up preset with a check, dot or "X" in
it which offer "additional info or services". They inevitably
set you up for a deluge of unwanted e-mail, plus propagate your
profile info to their sites (and their associates, and theirs...
and so on).
6. Try NOT to use cards tied to your bank or creditor, rather
use pre-paid cards or try to use cash, to make store purchases.
The purchases you make get fed into massive databases which could
conceivably be used to your disadvantage.
7. Don't send off online requests for free samples, enter contests
in Malls, play online gambling games, send off for "free" merchandise,
or believe "You are a winner", "You have won", "You
have been selected to receive", "free trial offer", "no
risk/no obligation offer - cancel at any time", etc.
You may never receive anything at all, or get a cheap piece of
useless merchandise, but at the very least you can rest assured
that you've been entered on at least one mass-mailing list,
not to mention guaranteed to be given abundant similar opportunities
with more advanced scams in the future.
8. Be careful about referral and family/acquaintance list requests,
which when completed offer you a bonus or prize, even from YOUR
CHILD'S SCHOOL. The value is neither worth that of the collected
personal data you (or you children) provide OR the time required
to complete the list, not to mention the possible consequences
to the unfortunate listees.
9. Don't go for the vacation/cruise package deals you get in the
mail, at the mall, off the office fax, or unsolicited on the web.
Your package will not be what it was presented to be, have numerous
restrictions and obligations and your cost will ultimately be higher
than if you had purchased it normally through a reputable agency.
More Information on Identity
Theft
Iowa Seizes 'Sucker List' Mail Responses
By: Scott Hovanyetz
Senior Reporter - dmnews.com 12/15/03
The Iowa attorney general's office seized 7,000 pieces of mail
last week that it claimed were responses to a fraudulent sweepstakes
solicitation campaign conducted by mail and telemarketing.
Acting on an impound order from a county judge, authorities took
the mail Thursday from a commercial mail drop in Clive, IA. According
to the attorney general, the mailers were sent in response to a
mass-mail solicitation aimed at developing a "sucker list" of
elderly consumers to be targeted later in a telemarketing fraud
scheme.
Richard James Panas of Rock Hill, SC, arranged for the mailers
to be brought to the commercial drop in mid-November, the attorney
general said. The commercial drop cooperated with the investigation
and was not charged.
According to the attorney general, the mailers misled consumers
into believing they had won substantial prizes but had to pay "administration" or "pre-processing" fees
of $10 or $20. While those solicitations alone are illegal, the
goal of the campaign was to develop a list of consumers likely
to fall prey to similar telemarketing prize schemes that could
cost them up to $5,000, the attorney general said.
A call to Panas' list and direct mail business, R.P. Associates,
was not returned Friday. Panas is under federal investigation and
is wanted for arrest in Nevada, according to the attorney general.
Among the lists on the rpassociates.com Web sites are several
of sweepstakes and prize-promotion participants. One ad for a list
titled "Avalanche of Checks" described consumers on the
list as "sweepstakes enthusiasts" who responded to an
offer of up to $10,000 in prizes guaranteed to all participants
and who also sent a $9.95 "acquisition fee to receive a family
collection of discount certificates with a fully redeemable value
of over $2,000."
List Brokers Facilitate Fraud
03/05 - DES MOINES. Attorney General Tom Miller said today that
the Consumer Protection Division of his office has asked the Polk
County District Court to order Walter Karl, Inc. -- a major U.S.
list broker and list management service based in Pearl River, NY
-- to provide information in response to the State's investigation
of direct mail and telemarketing schemes.
"Telemarketing schemes continue to harm Iowans, especially elderly Iowans,
and they often rely on well-established U.S. businesses that facilitate what
they know or should know is unlawful predatory activity," Miller said.
"In this instance, our investigation seeks to determine whether Walter Karl's
services are used by fraudulent operators, and whether the list-broker should
have known of such activities. Our overall objective is to deny deceptive telemarketers
access to the crucial tools they need," he said.
In a filing made yesterday in Polk County District Court, Miller's office
told the Court that, "After a period of cooperation - albeit slow
and fitful cooperation - Walter Karl refused to provide certain key information" in
response to the Consumer Protection Division investigation. The Attorney
General's filing asked the Court to order Walter Karl to respond fully,
under oath, within 30 days to specific investigative questions posed
earlier by the Consumer Protection Division.
The filing seeks information such as what Walter Karl knows about how
lists were created, how lists were used and by whom, and steps the company
takes to ensure that persons using a list are not defrauding people on
the list.
"Fraudulent telemarketers continue to plague Iowans, but most of the worst
schemes now operate from Canada and other countries. They are hard to stop," Miller
said.
"But Federal Trade Commission rules give us a strong tool. The FTC Telemarketing
Sales Rule prohibits anyone from providing substantial assistance or support
to a telemarketer when they know or should know that the telemarketer is using
certain deceptive or abusive tactics, and we have authority to enforce the rule," he
said.
"So now we are focusing on U.S. businesses that may provide crucial 'cooperating
infrastructure' to deceptive telemarketers - companies that make the automatic
withdrawals from consumers' bank accounts, for example," Miller said. "In
this instance, we are investigating whether Walter Karl's list brokering and
management services are used by fraudulent operators - and whether the company
knew or should have known as much."
Today's filing is called an "Application for Order Enforcing Attorney
General's Civil Investigative Demand." It asks the Court to prohibit
Walter Karl from doing business in Iowa if it fails to comply with a
Court order to fully respond to the State investigation.
The court filing explains that the Consumer Protection Division came
to focus on Walter Karl, Inc., as the division sought to track down the
source of fraudulent-appearing sweepstakes-prize mailings received by
an elderly Iowan in late 2003 and 2004 - mailings an investigator recognized
as resembling or appearing to be "screening mailings" designed
to create a list of vulnerable consumers who would be good targets for
subsequent telemarketing fraud. (Click here for investigator Barb Blake's
affidavit filed 3-2-05 with the Application to Enforce.)
Further investigation established a link between the questionable mailing
enterprises and the list management business of Walter Karl, Inc., where
lists developed by the mailing enterprises were being rented. Sweepstakes
mailings provided to the Court were traced to "Granite Wholesalers" and "Skypoint," both
believed to be located in Canada and Australia. The Walter Karl website
advertised a Granite Wholesalers list of 118,966 names characterized
as "avid sweepstakes players," according to the filing, and
a Skypoint list of 108,894 names characterized as "sweepstakes enthusiasts."
According to the State filing, other lists offered at the Walter Karl
website included lists described as "cash-hungry individuals," "impulsive
buyers. . . primarily mature," "hard core sweeps fanatics," "credit-seeking
individuals...looking...for ways to regain a good credit standing," and
sweepstakes contestants "over the age of 40, with household income
of approximately $25,000."
Last year, the Consumer Protection Division issued a formal "Civil
Investigative Demand" under the Iowa Consumer Fraud Act to determine
the extent to which Walter Karl's list brokering and management services
are used by fraudulent operators. Yesterday's filing asked the Court
to order Walter Karl to fully respond to the Civil Investigative Demand.
The court filing contains numerous pages detailing what information is
being sought and why, and how Walter Karl has "refused to provide
certain key information, including information it had earlier agreed
to provide."
The filing says: "Details regarding who rented lists of ostensibly
vulnerable (and often elderly) consumers, and for what purposes those
lists were rented, is a core part of the Attorney General's inquiry.
For example, it would be important to learn whether telemarketers in
Canada submitting suspect telemarketing scripts are nevertheless able
to obtain lists of demonstrably vulnerable retirees identified as having
an acute interest in prize promotions."
The suspected links between sweepstakes mailings and high-stakes telemarketing
fraud:
The Consumer Protection Division filing discusses how "low-stakes" sweepstakes
mailings may be connected to higher-stakes deceptive telemarketing. Iowans
may receive mailings that appear to indicate they may be winners of large
sweepstakes prizes (say, $1 million), if they only will pay some kind
of "authorization fee" or "report fee" or "transfer
fee" of, say, $29.95 or $24.99.
The division believes that persons who respond to such mailings often
are put on lists used by Canada-based deceptive telemarketers. (Consumers
also lose the "fees" they paid.) A typical big-ticket telemarketing
scam from Canada might involve a call to a vulnerable older Iowan, a
pitch that the Iowan had won millions in a lottery or sweepstakes or
prize promotion - and a requirement that the Iowan pay $1,000 or $5,000
or even more to collect the prize. (The schemes use many ruses to justify
the advance payment the victim must make to receive the millions in prize
money - paying taxes in advance, customs fees, etc.) Victims win no big
prize, and they lose what they pay.
The Consumer Protection Division has undertaken other action to tackle
problems of deceptive mailings and deceptive telemarketing, including
challenging businesses that may "facilitate" such schemes:
* Last April, a Polk County District Court Judge completely banned a
direct mail and telemarketing operation owned by Richard Panas from doing
any business in Iowa. In late 2003 and early 2004, Miller's office obtained
an impound order and seized about 22,000 pieces of mail that were headed
to Panas and his businesses based in Rock Hill, SC -- via a mail "drop
box" in Clive, Iowa. The Consumer Protection Division alleged the
mail was from vulnerable older people all over the country who had been
tricked into sending checks to Panas in response to his bogus prize mailings
- and alleged that names of people who responded would go on lists used
by other con-artists for big-ticket fraud schemes.
Among other items, the Attorney General's filing yesterday asks the Court
to order Walter Karl, Inc., to provide details and documents relating
to Walter Karl's management or brokering of lists for Panas, and vice
versa.
* Last September 3, the Consumer Protection Division obtained a court
order to impound or seize mail coming to another commercial mail-drop
box in Des Moines, interrupting an alleged scheme to deceive elderly
consumers into thinking they were winners of huge sweepstakes prizes.
Mail coming to the box - which was then shipped to businesses based in
Vancouver, Canada -- would make a 'hot list' for telemarketing fraud
or other schemes.
* Last September 17, the Attorney General's Office filed suit in Federal
District Court alleging that an Arizona electronic withdrawal company "facilitated
consumer fraud" by enabling deceptive telemarketers to automatically
withdraw money from people's bank accounts without proper authorization.
On October 7, the Court entered a preliminary injunction ordering "Teledraft,
Inc." to comply with federal and Iowa laws concerning telemarketing
fraud and other abuses while the lawsuit is pending.
* On Feb. 15, 2005, Attorney General Tom Miller announced that "Electracash,
Inc.," a third-party ACH or automated clearing house processor located
in Signal Hill, Cal., &has stepped up to the plate and agreed to
take many positive steps to avoid processing withdrawals for fraudulent
schemes." The company also paid a total of $15,774 to 56 Iowa victims
of a telemarketing scam. Electracash did not perpetrate the scam, but
the con-artists used the company to access people's bank accounts through
the ACH system.
Mooch Lists Make Money... for the scammers.
"Mooch lists" can contain a disturbing amount of personal
information about past victims —full name, address, phone
number, even bank-card numbers and the amount they've spent on
previous scams.
Some lists even rank victims based on their perceived vulnerability.
Others might include helpful scamming tips: "Mention religion.
This person loves Jesus! "
People on these lists have been victimized at least once by a
telemarketing scam and are susceptible to being victimized again.
A list used in a reverse boiler-room event included people who
had lost a few dollars up to more than $30,000.
Elderly Victims on Lottery Scam Sucker Lists
08/07 - Nebraska - Every day envelopes pour into Mary Peters’ mailbox
from all over the world and they all come with guarantees of big
lottery winnings.
Peters, 88, receives about 6-10 promises that she has won a foreign
lottery every time her mail is delivered. She said she has received
as many as 18 in a single day.
“They never stop,” Peters said. She has collected
several boxes of the offers.
Peters’ name and address of the home where she has lived
for nearly 60 years is on a “sucker’s list.” Since
she responded to an offer several years ago, the mailings have
increased ten-fold.
People who respond to telemarketing fraud or sweepstakes mailers
are often placed on a sucker list. Sucker lists, which include
names, addresses, phone numbers and other information, are created,
bought and sold by fraudulent mailers and telemarketers. The lists
are considered invaluable because dishonest promoters know that
consumers who have been tricked once are likely to be tricked again.
It’s called “reloading.”
As a result, people on the sucker list become flooded with letters,
e-mails and phone calls with various offers – lottery wins,
investment plans, get rich schemes and work from home offers.
And once they start, it’s difficult to make them stop.
Fritz Dodson, Peters’ brother, began collecting the bundles
of offers and trying to find out how to get them to stop coming
to his sister’s address.
“We reported it to the police and they weren’t too
interested,” Dodson said. “I reported them to Attorney
General Jon Bruning and all I got back was a calendar and a letter
that said, ‘don’t get duped.’”
Lt. Rick Ryan of the North Platte police said they get 4-5 calls
from people about the lottery and sweepstakes offers every single
week.
“They’re almost all generated from outside the U.S.
to avoid prosecution,” Ryan said. “They look like they
come from official U.S. banks or businesses but they don’t.”
Ryan said any offer that requires you to send money is not a legitimate
one.
“Do not send money or a fee to these places,” Ryan
said. “If they ask for money or information, it’s a
scam.”
Most of the offers include a realistic looking check, some claim
to be “certified.” But the checks are well-disguised
frauds and bounce when deposited or cashed.
Richard S. Bialek of North Platte says his misguided faith in
a lottery offer could land him in jail.
Bialek, 28, received what he believed was a lottery check from
the USA Mega Jackpots in the mail and took it to the Bank of Stapleton
in North Platte where he had his account.
A letter accompanying the check said Bialek had won $175,000.
The letter told Bialek to keep his winnings confidential and send
USA Mega Jackpots $3,500 to cover the “insurance/processing” fee
required before the “big funds” would be remitted to
him.
On May 21, Bialek deposited the check in his account and immediately
took out $1,000. He said the bank verified the check before he
deposited it.
Later, Bialek and his wife spent the other $2,500 on a down payment
for a trailer house.
When the fraudulent cashier’s check was returned to the
bank several weeks later, Bialek said he couldn’t repay it.
“I offered to give the bank titles to all my vehicles as
security so I could repay the money,” Bialek said. “But
they wouldn’t accept them.”
The bank turned the check over to the Lincoln County Attorney’s
office. He was cited by the North Platte police for felony theft
by deception and must appear in court August 17. He could face
a maximum five-years imprisonment if convicted.
Ryan said an investigator cited Bialek because he believed Bialek
knew the check was fraudulent.
Bialek, an apprentice electrician, maintains he is a victim of
the fraud and trusted the bank to know whether or not the check
was legitimate. He said he intends to fight the charge in court.
“The bank gave us $1,000 immediately,” Bialek said. “If
they can’t tell the difference, how can I?”
“These scammers depend on people getting greedy,” Ryan
said. “When they receive a big check, people sometimes let
greed overtake their common sense.”
Lindee Doyle, a personal banker at Wells Fargo, encourages anyone
who wonders if a check they received in the mail is legitimate
to talk to their banker.
“If the check is deposited and it turns out to be counterfeit,
that amount of money will be removed from their account,” Doyle
said. “If it looks too good to be true, it probably is.”
Doyle said the scams seem to come in waves but regular customers
do bring in sweepstakes checks that are fraudulent.
According to the Federal Trade Commission, it’s illegal
for any foreign lottery – legitimate or not – to use
the U.S. mail to solicit customers. In the last year alone the
post office has gone to court to shut down 39 different lottery
schemes and destroyed 800,000 of the phony offers that were headed
into this country.
Meanwhile, the postal service advises consumers not to throw these
letters away. They are following the paper trail and say if you
get one, give it right back to your mailman.
Dodson would like to see more done with these fraudulent mailings
by law enforcement and postal officials. He believes they prey
on the elderly who, sometimes, are trust too much.
“It’s not enough to just throw these fake offers away,” Dodson
said. “They need to be prosecuted to the fullest extent of
the law.”
The North Platte Bulletin
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