Prizes, sweepstakes and lotto fraud were among the top 10 complaints filed with the FTC in 2004.
By DIANE C. LADE
KNIGHT RIDDER NEWSPAPERS
FORT LAUDERDALE, Fla. -- Rose Hanken couldn't believe her luck when an official with the Federal Trade Commission called her in April, saying she had $350,000 coming to her from one of the several contests she entered over the years.
The man was so convincing and friendly -- at one point, Hanken, 88, offered to make him one of her famous cheesecakes -- that she didn't question his instructions. He called several times over the next few weeks, each time asking her to wire money to Costa Rica to cover new costs involved with her windfall: for insurance, to clear customs, to insure a larger $3.5 million pot the commission had uncovered for her.
But the prize money never arrived as promised at Hanken's Delray Beach, Fla., home. The nice man stopped calling. Suddenly, the telephone number where they always answered "Federal Trade Commission" was disconnected. And Hanken, a retired community college business teacher, was out $7,850.
Consumer-fraud officials say Hanken was taken by a new twist on a time-tested scheme: the lottery or prize scam. Senior women are prime targets and the crime takes place in their homes, where they are bombarded by mailings or telemarketing calls.
"There are not enough [attorneys general] and FBI agents to stamp them out. These scams never are going to go away," said Sally Hurme, an attorney with the AARP's Consumer Protection Unit in Washington, D.C.
Prize scams typically claim that the cash is coming from a foreign government's lottery or a sweepstakes. Hurme, however, never has heard of criminals invoking the name of the Federal Trade Commission.
The FTC actually is involved with lotteries -- in tracking complaints from consumers who have fallen for fake ones. Prizes, sweepstakes and lottery fraud were among the top 10 complaints filed with the commission in 2004, with 19,430 complaints nationwide.
There probably are many more incidents, however, as victims often are too ashamed to report they've been conned. Hanken wants to tell her story in hopes that other seniors will learn from her mistake.
"I've been very prudent and wise in my finances all of my life, and I've been working since I was 12 years old," Hanken said. "This guy had some line. He had me believing."
Chuck Harwood, director of the FTC's northwest regional office in Seattle, said prize and telemarketing schemes often operate out of Canada or offshore, making perpetrators difficult to track. "Money that you wire can be picked up anywhere. Even if you think you have a location, it won't be very helpful," he said.
Hard to trace
Hanken filed a complaint with Seniors Vs. Crime, a volunteer program created by the Florida attorney general to assist older consumers. Al Payne, who manages the South Florida office based in Delray Beach, referred it to the FBI but said Hanken shouldn't count on a happy ending.
"As soon as I mention something where you have to send a check to Aruba or Curacao, the FBI says, 'We can't find those people.' If someone asks you to wire money to some Caribbean island, you know it's a phony," Payne said.
Hanken's case was typical in many ways, Harwood and Hurme said.
A 2003 AARP study that compared 442 victims of lottery and investment scams found the lottery victims were far older than those taken by investment schemes, with an average age of 74.5 years. They also were more likely to be women and living alone.
Hanken admits that in the past, she's responded to mailings that asked for a small fee to enter a sweepstakes. Hurme said that probably landed Hanken on a "mooch" list that scammers sell to others.
"You bite once and your name is a valuable commodity," Hurme said. In a single day last month, Hanken got eight sweepstakes letters and prize offers by mail, plus a telephone call from a man claiming to have a lottery winning for her from England.
The solution? Hang up the phone and toss out the mailings, Hurme said. But it's not easy.
"Con artists know what buttons to push. It's not that the victims are so vulnerable," Hurme said. "It's that the people working these phones are making thousands of calls a day and they're good at what they do."