A couple weeks ago, the New York Times ran a chilling account, "Bilking the Elderly, With a Corporate Assist," about how financial predators operate and how presumably legitimate businesses help them. Here's how it opens:
The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.
Then, the criminals emptied their victims’ bank accounts.
Richard Guthrie, a 92-year-old Army veteran, was one of those victims. He ended up on scam artists’ lists because his name, like millions of others, was sold by large companies to telemarketing criminals, who then turned to major banks to steal his life’s savings.
Mr. Guthrie, who lives in Iowa, had entered a few sweepstakes that caused his name to appear in a database advertised by infoUSA, one of the largest compilers of consumer information. InfoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers, regulators say.
InfoUSA advertised lists of "Elderly Opportunity Seekers," 3.3 million older people "looking for ways to make money," and "Suffering Seniors," 4.7 million people with cancer or Alzheimer's disease. "Oldies but Goodies" contained 500,000 gamblers age 55 and older, for 8 1/2 cents apiece. One list said: "These people are gullible. They want to believe that their luck can change."
For the whole article, click here.
InfoUSA is one of the nation’s largest "list brokers," matching buyers and sellers of personal data. The company, which claims to have records on 210 million Americans, counts among its clients Readers Digest, Publishers Clearinghouse, and Condé Nast. But according to banking documents, court filings, and e-mail messages reviewed by the Times, infoUSA also sold thousands of elderly Americans’ names to known criminals. This includes World Marketing Service, a company that a judge shut down for running a lottery scam; and Atlas Marketing, which a court closed for selling $86 million of bogus business opportunities. Federal Trade Commission (FTC) rules prohibit list brokers from selling to companies engaged in obvious frauds.
Democratic presidential candidate Barack Obama responded to the Times article by issuing a press release that includes a letter he wrote to the FTC demanding to know what it was doing to protect vulnerable seniors. Specifically, he asked what the FTC was doing to regulate the sale of telemarketing databases to companies that are under investigation or have been prosecuted for fraud, what's being done to educate seniors, and what enforcement actions have been taken against data brokers, telemarketers, or "enabling financial institutions" (the Times article also sheds light on how banks and financial institutions let crooks access seniors' accounts).
Unfortunately, Obama's release hasn't gotten much play. Wouldn't it be great if this became an issue in the 2008 campaign? Maybe then, we'd see some action.