The U.S. Senate Special Committee on Aging will hold a hearing on Wednesday to investigate a growing scam that's sweeping the country and robbing many vulnerable seniors of their life savings.
"We've got to find a way to stop these swindlers from robbing and threatening our most vulnerable seniors," said Aging Committee Chairman Bill Nelson, (D-FL).
And said Susan Collins (R-ME), the aging panel's ranking member, "Our parents and grandparents worked hard their entire lives and saved for retirement. They should not be targeted by criminals who want to rob them of their hard-earned savings.
"While I believe that our Senate hearings will increase public awareness of these schemes, it is also critical that governments at all levels and across international boundaries work together to shut down these con artists before their sophisticated scams exploit yet another trusting senior citizen," Collins added.
Scam-artists -- many of them from Jamaica - are conning some seniors out of thousands of dollars by promising them huge foreign lottery winnings that they can collect by putting up money to pay supposed fees or taxes. In Florida, for instance, one financial planner had to go to court to become a guardian of one his clients to stop her from sending money to Jamaica after she'd already lost $370,000. And, in Maine, a retired pilot recently lost $85,000 to scam artists on the island.
The scam has U.S law enforcement officials scrambling to find ways to contain the problem and consumer advocates, such as AARP, rushing to inform the public on how best to protect against such schemes.
According to the U.S. Federal Trade Commission (FTC), the lottery scam and others like it could be bilking Americans of out $1 billion annually. In 2011, the FTC received nearly 30,000 complaints from citizens about such scams--a figure the agency admits could be much higher since an estimated 90 percent of scams go unreported by victims because they're too embarrassed or fearful to contact authorities.
Typically, the lotto scam call comes from an area code in Jamaica -- 876 - and unsuspecting individuals here are told they've won a foreign lottery. The con-artists then tell their victims to make an advance payment to cover taxes and fees needed to release the lottery winnings. Over time, the scammers lead their victims along, offering reasons why their winnings have been delayed, while continuing to ask for more money. Scammers tell their victims to use wire transfer companies or prepaid debit cards to send their money.
Law enforcement official say the Jamaican fraudsters have been known to threaten to harm victims or their family members. The crime has become a lucrative business on the island, with competition for call lists growing so fierce that Jamaican police recently reported that lottery fraud rings were behind 40 percent of homicides in just one parish there.
On Wednesday, the Senate Special Committee on Aging will hear the tales of scam victims from Florida and Maine. Additional witnesses include; local and federal law enforcement officials; a fraud expert from the money-wiring company Western Union; and, the president of AARP, who will be accompanied by a leading expert on fraudulent schemes affecting the elderly.