Oct. 30, 2009 at 9:00 AM ET
Criminals are stealing the Federal Trade Commission's identity and using it to scam consumers around the country, the agency warned on Thursday.Scam artists are even impersonating individual FTC employees -- in one case, a criminal posed as a recently deceased press officer -- to enhance their deception.
"Our good name is being used to defraud people, and that's very disturbing," said Betsy Broder, head of the FTCs privacy and identity theft division. But the use of individual FTC employees' names as bait is particularly worrisome. "Some of our people have been very shaken up once they find out their personal names were used. ... This is particularly pernicious because it gives people a sense that this is legitimate and reliable."
In one case, a 67-year-old building inspector from Washington state named Ralph (he requested that his last name not be used) sent $1,300 to a criminal who identified himself as FTC Secretary Donald Clark from the "fraud division." The imposter said the agency was overseeing a sweepstakes, and the money was needed to pay for insurance on delivery of a $500,000 prize that Ralph had won.
To add to the air of legitimacy, the imposter left a call-back number in Washington D.C.’s 202 area code.
In similar cases, caller ID indicated the call had originated from the Federal Trade Commission, Broder said. The criminals used Internet-based telephone services to perform the caller ID trick, she said.
When Ralph called the number supplied to him, an answering machine message announced that the caller has reached the FTC.
"It was very believable," Ralph said. He said he didn't know how the criminals got his phone number in the first place, but thought it might be related to a sweepstakes entry form he'd filled out. He sent the money via Western Union to an address in Florida.
Silvia Westapher, 84, of Los Angeles, who said she fills out dozens of sweepstakes forms every week, sent about $1,100 via Western Union to an address in Jamaica after she got a call from someone claiming to be a "federal agent." Westapher was told she'd won a contest and had to pay a fee to collect her winnings.
"I'm really angry at myself for falling for it," she said. "I don't really have enough to get by to begin with, so this really hurt."
Fraudulent sweepstakes, many of them based overseas, consistently rank among the most persistent scams that target the elderly, Broder said.
Recently, con artists have honed their techniques to invoke the names of federal agencies.In turn, the U.S. Justice Department has begun aggressively prosecuting such crimes. Last month, the agency announced that four telemarketers in Costa Rica who had stolen $20 million from U.S. citizens had been convicted and sentenced to 50 years in jail. In many cases, the criminals used the name “Sweepstakes Security Commission” to gain the trust of victims.
Wire transfers -- which are almost always non-refundable -- are usually at the center of such scams.Last week, MoneyGram International paid $18 million to the FTC to settle charges that it ignored use of its service by criminals to steal $84 million from U.S. consumers between 2004 and 2008. MoneyGram admitted no wrongdoing and agreed to beef up security.
Broder said consumers should be very wary about wiring money to any organization, and most important, should never wire funds in anticipation of receiving a payment.
“Never pay up front in a sweepstakes.If someone asks for an upfront payment, that’s a sure sign it’s not legitimate,” she said.