Scams targeting old get a shameful assist

Published May 22, 2007

In the Hall of Shame for those who allow vulnerable old people to be bilked out of their savings, add these familiar names: infoUSA and Wachovia banks. Scam artists bought mailing lists of elderly Americans considered gullible -- compiled and marketed by infoUSA -- to find easy marks. Then the schemers drained their victims' accounts using unsigned checks that were willingly cashed by Wachovia.

It happened to Richard Guthrie, a 92-year-old widower with a failing mind, who was the focus of a New York Times report on such scams published Sunday. In a particularly cruel act of fraud, criminals counted on Guthrie's loneliness and confusion, as well as the compliance of legitimate businesses either unaware or uncaring of the misfortune to which they were a party.

No one is saying that infoUSA or Wachovia broke the law, though an investigation could soon be under way. Yet criminals found it far too easy to profit off of those companies' practices. It worked this way: Telemarketers intent on fraud bought mailing lists containing millions of names from infoUSA. The New York Times reported that the lists had titles such as "Suffering Seniors," although infoUSA denies ever using those labels.

Guthrie ended up on one of those lists and said he "loved getting those calls" because "since my wife passed away, I don't have many people to talk with." Soon, the con men tricked Guthrie into giving up his banking information, then printed up bogus checks.

The con men didn't even bother to forge Guthrie's name; the unsigned checks were honored at Wachovia. This went on over two years, even when Guthrie's bank warned Wachovia that the checks were unauthorized. Wachovia returned some of the money to Guthrie's account, although he apparently lost more than $100,000 during the scam and at one point couldn't afford to pay his bills.

It is difficult for infoUSA, which advertises the largest consumer database, to claim it had no clue as to how the lists were being used. The company sold its lists to companies that were under investigation or the subjects of consumer complaints, the New York Times reported.

Wachovia has no excuse, either. While it is legal for a bank to accept unsigned checks, few do. Earning millions in fees, Wachovia has accepted $142-million worth of unsigned checks for unauthorized withdrawals, federal prosecutors told the New York Times. It's a troubling practice for a bank that also markets a free checking account to attract older customers.

After reading the newspaper report, Rep. Ed Markey, D-Mass., asked the Federal Trade Commission to investigate the matter. One question the FTC needs to answer is how otherwise respected companies would allow themselves to be used by scam artists. Whatever the outcome, those companies need to clean up their act.