A recent New York Times article by Charles Duhigg reports that tech savvy thieves are employing the market research of major corporations to accomplish an old crime: cheating the elderly.
Con artists living across the globe can now access the names and telephone numbers of thousands of Americans, categorized by age, sex, and household income, and use the information to operate banking scams without ever entering the United States. According to Duhigg, older Americans lose hundreds of millions of dollars each year as victims of consumer fraud.
Publicly held companies, such as InfoUSA and its subsidiary, Walter Karl, compile and sell lists of consumers. Con artists purchase the lists from the companies’ websites, then pose as telemarketers in order to obtain senior citizens’ bank account numbers. Finally, the thieves use unsigned checks to steal money from the accounts.
One would think that images of crooks robbing Grandpa and Grandma would cause public outcry and spur government regulators into action. But efforts to stop the scams remain lukewarm. After all, these scams can only work if senior citizens choose to hand over their banking details to the telemarketers. Government and society’s half-hearted response might be due to our view of the elderly as dispositional actors giving out critical information to strangers over the phone, something we would never do ourselves.
This view of senior citizens causes us to miss a lot of the situational factors that allow these scams to succeed, and that cause thieves to target the elderly in the first place. Many senior citizens spend the day at home alone, without the company and protection of family. They are available to talk to telemarketers, and as Duhigg explains, even eager for the calls, in some cases. Some seniors fear losing their independence, so they are reluctant to ask for help with financial record-keeping and bill payment, a silence the con artists rely on.
By recognizing the situational as well as the dispositional forces at work, we see that senior citizens are not alone in helping the scam to operate effectively. The list brokers market the elderly as attractive targets (placing them in categories that suggest where they might be vulnerable to persuasion), making them an attractive target for thieves. Meanwhile, the banks fail to implement proper security measures while continuing to profit on transaction fees from illegal withdrawals.
A quick visit to the Walter Karle website demonstrates just how accessible the list brokers have made their product for the general public, including criminals. Create a user name, click past a disclaimer, and you too can purchase the name and contact information of thousands of consumers, conveniently classified by demographic information. A keyword search for “elderly” or “senior” returns the “Upscale Senior Database,” described as “a growing market that has the time and money to enjoy themselves” and “About Seniors with Pets,” advertised as “older people who regard their pets as family and give them the best care their owners can provide.”
The FTC prohibits list brokers from knowingly doing business with criminals, and the Federal Reserve has recently increased regulations for banks accepting unsigned checks. To be sure, the criminals who are caught are punished and sent to jail, but cregulations are hardly foolproof. The majority of the responsibility for stopping these scams still rests on the elderly victims themselves. The banking reforms only occurred after most state attorney generals urged the Fed to end the unsigned-checks system altogether, a step the federal government has not taken. And Duhigg reports that despite federal regulations, the attitude among list brokers is that they are not responsible if someone else commits a crime. Major corporations, such as Wachovia and InfoUSA, have been warned by government investigators that they are assisting criminals, but the companies continue to do business with the con artists.
Lax corporate regulation not only threatens the financial security of our senior citizens, it also perpetuates our stereotypes about the competence of the elderly, a phenomenon discussed in previous posts. Criminals, list brokers, and even banks want us to see the elderly as dispostional actors making bad financial decisions. Otherwise, the scams would fail, or the corporate entities would be held responsible. In reality, many seniors face overwhelming situational odds in dealing with the con artists.
By shifting responsibility from situationally vulnerable senior citizens to large institutions, we can shift the “choices” to individuals who are better situated to make them and remove incentives to exploit those who aren’t. With a little more accountability on the part of list brokers and banks, our elderly citizens can hold onto their money and their independence.