Today’s NY Times has a lengthy piece entitled “Blinking the Elderly, With a Corporate Assist”. It is really rather a depressing piece about how information brokers, such as InfoUSA sells telemarketing lists to criminal organizations that in turn prey upon elderly to defraud them. The story features a 92-year old man whose life savings were stolen when he gave out his banking information to a telemarketer. You can view this article here on the NY Times website (you may need to register to see if, but that should be free) and we have posted a couple of brief excerpts below…
Telemarketing fraud, once limited to small-time thieves, has become a global criminal enterprise preying upon millions of elderly and other Americans every year, authorities say. Vast databases of names and personal information, sold to thieves by large publicly traded companies, have put almost anyone within reach of fraudulent telemarketers. And major banks have made it possible for criminals to dip into victims’ accounts without their authorization, according to court records.
The banks and companies that sell such services often confront evidence that they are used for fraud, according to thousands of banking documents, court filings and e-mail messages reviewed by The New York Times.
Although some companies, including Wachovia, have made refunds to victims who have complained, neither that bank nor infoUSA stopped working with criminals even after executives were warned that they were aiding continuing crimes, according to government investigators. Instead, those companies collected millions of dollars in fees from scam artists…
In a lawsuit filed last year, the United States attorney in Philadelphia said Wachovia received thousands of warnings that it was processing fraudulent checks, but ignored them. That suit, against the company that printed those unsigned checks, Payment Processing Center, or P.P.C., did not name Wachovia as a defendant, though at least one victim has filed a pending lawsuit against the bank.
During 2005, according to the United States attorney’s lawsuit, 59 percent of the unsigned checks that Wachovia accepted from P.P.C. and forwarded to other banks were ultimately refused by other financial institutions. Wachovia was informed each time a check was returned.
“When between 50 and 60 percent of transactions are returned, that tells you at gut level that something’s not right,” said the United States attorney in Philadelphia, Patrick L. Meehan.
Other banks, when confronted with similar evidence, have closed questionable accounts. But Wachovia continued accepting unsigned checks printed by P.P.C. until the government filed suit in 2006.
Commentary: It isn’t news that people are defrauding the elderly. The elderly has long been obvious and easy targets. Is it easier in the age of the Internet and identity theft? Maybe, maybe not. What is interesting about this case is Wachovia’s apparent willful blind eye to the activities. As readers of Ethisphere know, the Q2 Edition of Ethisphere Magazine publicized the 2007 Rankings (by industry) of the World’s Most Ethical Companies. Neither of the two banks featured in this article (Wells Fargo and Wachovia) made their financial service industry’s ethical leadership list. However, Wells Fargo was relatively close – and Wachovia missed out by a long shot. This is an interesting fact considering if you read this article closely, the business practices being spelled out by the NY Times closely and accurately affirm what the rankings have found.
