Thursday, January 06, 2011

Talkin' SCAMS!

Radio SmartTalk's broadcast on Thursday, January 6, 2011, over WITF-FM Radio (Harrisburg, PA), addressed the topic of scams -- over phone, by mail, through email, and on the Web -- in its program entitled Scams:
You know those e-mails from that Nigerian prince, who just needs your bank account number so he can send you his money? Or the voice mail message from a company that wants to give you a free vacation, if only you'll give them your social security number? Or the contest you just won (that you swear you never entered) for which all you need to do is send a small cash payment to claim your prize?

Scams are everywhere – and while some may be obvious, others are not. And that, according to U.S. Postal Inspector Louis DiRienzo, is because the scammers themselves are becoming increasingly sophisticated.

We'll discuss common scams, from mail fraud to online scams to phone solicitations. We'll welcome any examples you have, and along the way, we'll try to identify some red flags that may signal to you that the next great opportunity to come your way may be nothing of the sort.
There was mention about the susceptibility of senior citizens to fall prey to scammers.  If a senior has a trusting nature, available assets, changed or limited interaction with family, and heavy reliance upon benefit programs, then that person is a perfect target for a scammer.

I recognized many scams identified by the guest during the program.  Most of them are listed on the FBI's web page on Common Fraud ScamsSee also: Don't Get Scammed! Scams and Cons That Target Seniors, which was referenced by a Seniors for Living posting entitled Watch Out for Senior Scams (10/08/10).

Pennsylvania's Attorney General Tom Corbett (soon to be Governor) for years has educated and warned about scams affecting senior citizens.  See: PA EE&F Law Blog postings "Senior Crime Prevention University" Session (05/12/2008), and PA AG Speaks to Seniors about Scams (09/22/06).

Is education -- whether by a radio program or in seminars held by officials -- enough to stop such senior scams?  

According to recent published articles, senior scams are rising while other forms of crime decline.  See:  Nationwide, scams against senior citizens are on the rise, (07/28/10), by Dan Morse, published originally by The Washington Post, which concluded:  "Murders and violent crimes are down nationwide, but one kind of crime is rising steadily: scams against the elderly." 

And so it should not be a surprise that federal legislation was introduced on September 29, 2010, to address one area of senior scams -- affinity scams. 

H.R. 6305, which proposed the Preventing Affinity Scams for Seniors Act of 2010, or PASS Act of 2010, was summarized as follows:
  • Defines "affinity scam" as a transaction in which a person trusted by a senior, such as a caregiver, relative, guardian, "new friend," or service provider, claims to share similar interests or values and establishes a relationship with the senior, then uses the relationship to defraud the senior.
  • Requires each financial institution to:
  1. educate its staff about affinity scams and how to identify transactions that may be part of an affinity scam; 
  2. train staff members on educating seniors about affinity scams;
  3. provide senior depositors with educational materials on how to identify affinity scams; and
  4. offer seniors a "senior protection (checking) account." 
  • Directs the Bureau of Consumer Financial Protection to:
  1. issue implementing regulations; and
  2. audit financial institutions periodically to ensure compliance with them. 
  • Sets forth senior protection account requirements, including protective measures to block and investigate transactions suspected of being an affinity scam.
  • Instructs the Secretary of the Treasury to establish an income tax deduction of .77% of the average of the amount of deposits held by a financial institution in senior protection accounts.
  • Subjects a noncompliant financial institution to a civil liability with respect to a senior who has sustained actual damage as a result of the institution's failure to comply with this Act.
  • Directs the Secretary to require each financial institution, and each of its directors, officers, employees, or agents, to report any suspicious transaction relevant to a possible affinity scam.
Hopefully in the new session of Congress, similar legislation can be introduced and considered.

For now, you can listen online to the recent broadcast on Scams.

"Let this be a warning to others out there.
It can happen to anyone, anywhere. Beware!"

 Anonymous Commentor on SmartTalk website
(Graphic Source)