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Careful: Con Artists Are Busy

Since I wrote about victims of fraud a year ago, new scams and sophisticated twists on old practices have targeted others, from Carroll County to Bullitt County and places in between.

Free meal offers
Free lunch or dinner seminars are a common tactic aimed at the over-65 set, which sits on some $15 trillion in assets, making them “primary targets for scam artists,” says Christopher Cox, chairman of the Securities and Exchange Commission.

What really happens when you trade surf-and-turf for a sales pitch? “Huge percentages of these things give out false information, make misrepresentations, and sucker seniors in,” says Joseph Borg of the North American Securities Administrators Association, which is made up of state securities regulators.

At a dinner seminar in Atlanta last July, an insurance agent pitching equity-indexed annuities said several times that he was picking up the tab for dinner, while attendees were required to fill out paperwork for a follow-up meeting before dinner was served.

That’s part of the game, says Borg. “When they do the follow-up call, the high-pressure tactics begin. It’s one-on-one at the dinner table.”

Checks in the mail
The Carroll County woman was selected as a “mystery shopper” with a chance to earn extra income, according to the letter accompanying a cashier’s check for $3,900. She was told to cash the check and buy $200 worth of merchandise from two specific retailers while “evaluating” the service she received, keep $440, and wire the balance through a MoneyGram transaction to a third party.

The skeptical woman contacted the Landmark Credit Union in Massachusetts, the supposed issuer of the document, and learned that the check was a fake.

The old-time foreign-lottery scam still claims victims, even when the “winner” receives a cashier’s check without being asked to put up any money. It may take weeks to determine whether a foreign or cashier’s check is valid, and could bounce weeks after funds are made available to you. This could leave you on the hook to return the entire amount to the bank. And it is illegal for U.S. citizens to play in a foreign lottery, according to the Federal Trade Commission.

Dangerous con artists
The Kentucky Attorney General’s office says such scams are common and can leave innocent victims with dire financial and legal consequences. The Bullitt County victim even ended up with a few bruises.

She answered a knock one day from a young man representing a home-repair business, then went outside to show him what she might want done. Meanwhile, his accomplice entered the house to steal cash or credit cards. When the woman re-entered, a dresser was pushed onto her, pinning her to the floor. Bullitt Sheriff’s Office Detective Scott McGaha reported, “It really shows the potential of the men to be dangerous.”

Other schemes
Older Americans are also getting duped by a so-called lead card that can get them exposed to hard-sell pitches from the insurance industry. Sent through the mail, the card invites the recipient to mail an enclosed form for free information on estate planning, often implying the card is from the federal government or a senior-lobbying organization, such as AARP.

Two tried-and-true scams—pyramid and multilevel marketing schemes—keep trapping investors.

Almost all pyramid promotions are illegal because members earn money primarily from getting people to pay to participate. The pyramid eventually collapses when new members can’t be recruited. With a legitimate multilevel marketer, participants make money by selling products or services and getting commissions on sales made by their own recruits, not just by paying a fee to join the organization. It’s difficult to distinguish these from pyramid schemes, which is why you need to be very cautious before joining, says the Federal Trade Commission.


• If you are asked to pay a fee or “taxes” before you collect a prize, don’t.

• Do not provide a credit card number, bank account number, or Social Security number to anyone you don’t know.

• Do research on a charity before you give.

• Do not reply to ads or calls that “guarantee” loans or government grants.

• Avoid anyone offering an unusually high rate of return on an investment or an investment “without risk.”

• If you are sent a cashier’s check to pay your “fees” in a lottery, don’t cash it.

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