In this technological age, we often forget about snail mail, but scammers haven’t. Increasingly scammers are using traditional mail to target the elderly. This may be because many older people are not on social media and do not use email.
Many older adults also still write checks. Scammers are on to this and have tailored their fraud campaigns to checks.
Here’s how it typically works
A scam artist creates what looks like a winnings sheet, possibly even an A- 41 form that says “Prize Award Notice” requesting a “payment data transfer.” It all looks legit. Until you read the small print that says the correspondence “is not an award notification.”
Many elderly folks are fearful that they will not have enough money to last them. They worry they will not be able to pay their medical bills, the taxes, for nursing home care, or that they will not be leaving anything to their children. The scammers know this and hook the elderly by promising more and more money with each check they request. At first the scammers say to send in a $20 processing fee. But once the scammers get that check, they continue to send demands for more fees until their victim has run out of money.
Using international processing centers
The scammers typically run these checks through “payment processing centers” and after a cut by the processing center receive a wire transfer. These centers, such as PacNet Services, Ltd. in Canada, claim to serve universities, publishers, charities and marketing operations. PacNet claims to vet the companies for which they process payments, but said in a statement to CNNMoney that they do not verify all campaigns or material.
But PacNet’s inattention has cost many elderly victims dearly. One unsuspecting elderly woman in Iowa lost nearly $30,000 to a sweepstakes mail scam that was processed through PacNet. There are hundreds, if not thousands, of other victims as well.
What’s the government doing?
PacNet is based in downtown Vancouver and claims to be one of the industry's leading payment processors. However, the U.S. Treasury Department characterized PacNet as a "significant transnational criminal organization” according to a September 22, 2016 news article by CBCNews.
PacNet’s attorney states that all of the mail fraud was going on “unbeknownst” to PacNet. An investigation is ongoing. PacNet has also been investigated by Australian authorities and has paid out settlements.
A growing problem
The elderly in the United States are scammed out of $36 billion a year according to a 2015 report by True Link Financial cited in a Huffington Post article. The same study found that scamming is not limited to an isolated incident. The seniors that lost $20 or more to scams “went on to lose an average of $2,000 a year to other scams over the next five years.”