Perhaps Santa is right and “you better watch out” — not for his arrival but for scams, schemes, and ruses that are out to separate you from your money.
The Federal Trade Commission, Consumer Protection Division, has announced they have obtained a court order against Millenium Direct Inc. for ripping off consumers. And in the spirit of Not-Christmas, they targeted mostly elderly people. The FTC said that they closed the book on a scheme that tricked people into paying $25 to collect their “$1M prize money.”
Except there really is no prize money. Imagine that?
The FTC alleges that Terry Somenzi, Ian Gamberg, and David Raff mailed fake prize notifications to older consumers that said, “YOU HAVE WON A CASH PRIZE!” Of course, after they sent in their $25 these “winners” got nothing back. Some people paid the fee over and over in response to repeated mailings.
To make matters worse, those who replied to Messrs. Somenzi, Gamberg and Raff had their personal information sold to other consumer scams. The “more the merrier” must have been their operative phrase. Meanwhile, some unwitting consumers ended up paying substantial sums of money in hopes of obtaining that non-existent prize.
Today’s FTC order means that Mr. Raff and Millenium Direct (yes there is no second “n”) will have to cough up $501,895 and have been banned from the prize promotion business. Mr. Gamberg has been forbidden from mispresenting goods or services, but the case was dropped against Mr. Somenzi after he died last year.
This sad story is part of an international law enforcement initiative against mass-mail fraud. So, this little ploy was administered via snail mail and not through the internet.
Scams They are APlenty
According to Consumer Advocate groups, senior citizens are desirable candidates for direct mail fraud. Earlier this month a Florida resident pled guilty in a telemarketing scheme that soaked mostly elderly people of $3.3M. Ironically, the perpetrator here was a 62-year-old named Daniel Boyar. In addition to restitution Boyar could face up to 20 years behind bars.
Mail fraud is serious business, folks.
In Fort Lauderdale, two men were recently sentenced to seven years in prison for one count of conspiracy to commit mail fraud. The South Florida scheme ripped off consumers to the tune of $20 to $25M in an international lottery scam. Again, the target group was – you guessed it – senior citizens.
Millions of older Americans fall prey to these types of scams each year, according to the FBI. Two of the main types of fraud targeting seniors involve funeral or cemetery scams.
Here’s how the funeral scam works: The criminals read the obituaries and either call or actually attend the funeral service. (Talk about chutzpah!) They claim the deceased had outstanding debts, and then they try to swindle money out of the relatives for a fake “settlement.”
Then there’s the crooked Funeral Home that overcharged families for funeral services such as fancy caskets and “extra funeral features.” As such, seniors are directed by Consumer Protection advocates to shop around to make sure they aren’t getting ripped off by their friendly neighborhood funeral home.
There’s something about the spirit of Christmas that makes these schemes particularly appalling. Plundering older adults makes it even more unseemly. Nevertheless, these types of cons abound in droves – some by mail, others by phone and many more via the internet.
But for today at least one was stopped. We can only hope the FTC keeps at it and puts these guys where they belong: Behind bars.