Crooks impersonate relatives or friends and ask for rescue funds.
Dubbed the “Grandma Scam,” a new type of crime is sweeping the nation and costing unwitting consumers untold thousands of dollars.
Here’s how it works: the crook contacts the victim by email, through a social networking site (such as Facebook) or by telephone. Many times the victims are senior citizens.
Posing as the victim’s grandchild, friend or co-worker, the scammer claims to be in desperate need of funds. The crook often says he or she lost their wallet, wrecked their car and/or has been arrested.
Many times the crook claims the supposed emergency happened while he or she was travelling in Canada or some other foreign country.
The con man asks for money to post bail, pay a lawyer and/or return home. The victim is asked to withdraw funds from his or her banking account and wire the funds.
The crook will sometimes have a few details about the person they are impersonating to make the story plausible. To add a dash of realism to the scam, the crook might put another person on the phone who poses as a police officer, bail bondsman or immigration official.
The “grandchild” will tell the victim he doesn’t want his parents to know he’s in trouble and to keep it a secret.
One Idaho senior fell for such a ruse and wired $11,000 to a crook because she believed her grandson was stuck in a prison under horrible conditions. A Missouri woman sent three wire transfers totaling about $4,000 because she believed her two friends were being detained in England and needed emergency funds.
This type of crime is not limited to any specific part of the nation. If you conduct an internet search for the term “grandma scam,” you’ll find numerous news stories about such cases from across the country.
The scam often succeeds because the grandparent hasn’t kept in close contact with his or her grandchild and doesn’t recognize their voice.
A grandfather in Oregon received a call from someone claiming to be his grandson. The caller said he needed $3,700 wired because he had been in a car wreck in Toronto. The grandfather realized the caller didn’t sound like his grandson, but he figured the voice was different because of the “accident.”
The Grandma Scam has become so prevalent, both American Consumer News magazine and the Better Business Bureau of Central North Carolina have included this crime in their lists of the top 10 scams of 2009.
Nine Steps to Avoiding A Loss
If you are contacted by someone claiming to need emergency funds, here are nine steps you can take to make sure you don’t become the next scam victim:
As unlikely as this scam might seem, it continues to find new victims. To avoid suffering such a loss, mix a healthy dose of skepticism with a strong pinch of carefulness and then add a large portion of disbelief. Also, don’t hesitate to talk about this or any other suspicious financial situation with your financial representative – before you act!
Cary Yates is the market growth & development manager for Wells Fargo in Houston.