Telemarketing fraud has become an International scourge of staggering proportions. It operates out of back rooms in remote areas of the world where is difficult to track, uses sophisticated technology, and thrives in part thanks to the complicity of otherwise legitimate corporations, including some of the world's largest banks.

We have known for years that crafty scam artists target older Americans and in spite of the "do not call" registry, the cancerous growth of telemarketing and its criminal underbelly has continued unabated. According to the Direct Marketing Association, callers selling insurance plans, subscriptions, precooked meals, etc., racked up $177 billion in sales in 2006--$4.5 billion more than they sold the year before "do-not-call" took effect.

Millions of people age 60 and older have been victimized by telemarketers who sell them phony insurance polices, get them to donate to nonexistent charities and much worse. Posing as government workers or pharmacy employees, criminals will tell you that Social Security Administration computers have crashed or that your prescription records are incomplete and that payments or prescriptions will be delayed unless you provide your banking information.

Once a conniving crook has your banking information he can use a banking instrument called an "unsigned check" to deplete your bank account. If your local bank won't cash these types of checks, the greedy folks at banking giant Wachovia will be happy to oblige them.

The United States attorney in Philadelphia has filed a lawsuit claiming Wachovia ignored thousands of warnings that it was processing fraudulent checks. According to federal prosecutors, this publicly traded bank has accepted $142 million of unsigned checks from telemarketing companies that made unauthorized withdrawals from thousands of accounts.

Another bad actor in this tragedy is InfoUSA, one of the giant database companies that compiles and sells consumer information. InfoUSA maintains data on 210 million Americans and in 2006 it grossed $430 million selling lists mostly to large magazine publishers including Reader's Digest. But, InfoUSA also knowingly sells their lists to scam artists who specialize in bilking the elderly. According to The New York Times, InfoUSA has sold lists to companies under criminal investigation and even companies that have been successfully prosecuted.

If you are looking for some old suckers to scam, InfoUSA will gladly sell you names and contact information from its list of 3.3 million older people who are "looking for ways to make money" or from its list of 4.7 million people with cancer or Alzheimer's disease. They even market a list of 500,000 gamblers over 55 years old. The promotion for one their list says, "These people are gullible. They want to believe that their luck can change."

Just in the past year, federal agencies have filed over 50 lawsuits against telemarketing companies and scam artists accusing them of stealing more than $662 million. But this is just the tip of the iceberg--millions of people who are scammed never report the crime because they feel too embarrassed or in the case of some elders, they fear their children will want to take away their financial independence. The total amount of ill-gotten gains is in the tens of billions.

So here's what I think everyone should do about this seemingly insurmountable problem. First register your phone number and your mobile phone number at the National Do Not Call Registry. It is easy to do and will stop some if not all of your incoming telemarketing calls. Second, never talk to anyone on the phone if you don't know who they are. The friendly young lady from the Bank of America is quite possibly a member of a gang of thieves operating out of Mumbai.

Don't enter sweepstakes contests because many of these are complete fakes, designed only to get people's contact and other personal information. And even if they are legitimate, your name, address, phone number, age, etc., ends up on one of the lists, like those they sell at InfoUSA. Entering your information in a sweepstakes contest can be the beginning of a long chain of events--the result of which is you'll wake up one of these days and discovered all your assets have vanished.

Finally, if you have older parents or friends you care about; convince them to do the same. Only you can prevent telemarketing scams--your government is only on the case part time, and your bank is too busy making big buck to care much about the safety of your hard earned savings.

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posted at 05:26:35 PM