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Telemarketing Fraud Is Greatly Underreported in Victims 45+

"Off the Hook," a new AARP Foundation study found that the crime of telemarketing fraud is grossly underreported among older victims, but that those who are properly counseled by trained peer volunteers are less likely to fall victim to fraudulent pitches.

In one portion of the study, AARP found that 73 percent of investment fraud victims did not acknowledge having lost money, and only half of lottery fraud victims reported recent losses.

The findings came from a three-step study, funded by a grant from the Department of Justice, which examined telemarketing fraud victimization and tested interventions designed to prevent further losses.

AARP first studied how different intervention messages, presented to actual and potential telemarketing fraud victims by peer counselors, affected the listeners' responses to subsequent telephone sales pitches. Peer counselors called people at home to share information about telemarketing fraud and explained steps for avoiding fraud. A few days later, counselors called back and delivered a pitch mimicking a fraudulent offer, using the same methods as the telemarketers. In almost every instance, people who heard intervention messages were far less likely to respond to the "sting" solicitation. The most successful message reduced participation by two thirds.

"We saw that peer counseling about the specific dangers of telemarketing fraud and how to handle the come-ons is effective," said Bridget Small, Director of AARP Consumer Protection. "With two thirds of victims having a tough time spotting the danger signs, there is a tremendous need to fight the problem."

AARP then conducted telephone interviews with known victims of lottery and investment scams, and a sample of the general population, all age 45+ to determine the accuracy of reporting fraud. Overall, the majority of victims did not acknowledge their losses. Almost three quarters (73%) of the investment victims did not acknowledged having lost money recently, although law enforcement had contacted each of them. Only half of the lottery victims reported recent losses.

Additionally, victims expressed differences from the general population in their response to being pressured, their belief in having control in their lives, and reliance on hunches and intuition. The lottery victims were least likely to have, and use, technology to screen incoming calls, and more likely to answer the phone. Limiting consumers' exposure to unknown callers, either by call screening or ending calls quickly, is an essential step in reducing victimization.

Finally, interviews were conducted with professionals in the U.S. and Canada who work with older victims of telemarketing fraud, or supervise telemarketing fraud investigations. The professionals reported on strategies that have, and have not, been successful in modifying the behavior of victims involved in fraudulent telemarketing. They also suggested strategies that friends, family members and other professionals can use to help a victim caught up in telemarketing fraud.

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