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PREMIUM LEGAL RESOURCES LEGAL FORMS ASK A LAWYER

HIGH-TECH SWINDLERS FILCH MILLIONS By Don McLeod
AARP Bulletin, May 1995

Older Americans across the country are losing millions of dollars in a high-tech revival of an age-old fraud -- the "bank examiner" scam.

"Total losses [for those cheated] must be at least $5 to $10 million a year," estimates Jon Grow, executive director of the National Association of Bunco Investigators (NABI). The actual numbers could be much higher, he adds, because so many cases go unreported.

Average "take" on a bank examiner scheme: $10,000 per victim, Grow says, adding, "There's not a city in the country that hasn't been hit."

The fraud usually begins with a phone call. Sounding very official, perhaps a little threatening, the con artist may pretend to be a bank examiner, or possibly a police officer.

Whatever the caller's persona, the message rarely varies, as the prospective victim is asked for help in catching a dishonest employee at the bank.

You can do a good deed, the "official" says. You can even be a hero.

All you need do is go down to the bank and withdraw some money so they can catch the thief in the act. The victim is told to meet the phony cop or bank examiner, usually in a parking lot, and give him or her the money.

The impersonator may say the money will be held as evidence, or that it will be redeposited immediately into your account. Another scam: asking to see the money "to check serial numbers" but switching the envelope containing cash for one with only scrap paper inside.

"Once you hand over your money, there is no recovery," says Melvin L. Jeter, southern regional security director for NationsBank. "There's no way any money's going to get back."

Transparent as their act may seem, "bank examiner" flimflammers are fleecing older Americans out of whopping sums.

A man in Norfolk, Va., handed over $40,000 to one such swindler. A woman in Winston-Salem, N.C., volunteered $28,000 to another. And a Sarasota, Fla., retiree went to three different banks to make withdrawals for people he thought were cops. Before he found out they weren't, they had relieved him of $26,000.

Such fraud cases are on the rise, authorities say. "[The problem is] worse now than ever before," says NationsBank's Jeter. "And it's especially bad in places like Florida, where you have so many elderly [people] living," he tells a visitor to NationsBank offices in Sarasota.

What's more, he adds, these cases may be just the tip of the iceberg.

"For every [case] we might hear about, there might be 30 that would happen and people were too embarrassed to report," says Butch Garvey, an investigator for NationsBank in Sarasota, where officials talked with a Bulletin reporter.

"This is one of the most unreported crimes going," says Lt. Bill Stookey of the Sarasota County Sheriff's Department. "This scam has been around as long as there's been banks, I guess," says Detective Steve Bowles of the Winston-Salem, N.C., police department. "But there has been a resurgence of it since 1991."

No one knows exactly why this type of fraud is on the rise. But some experts cite the proliferation of computers -- through which hackers can gain confidential bank information about people -- and more cunning use of the telephone.

Whatever the reasons for the trend, swindlers prey largely on older people, usually widows, who grew up in an era when people respected authority. These individuals often are quite willing, even eager, to do a good deed.

Con artists scan local newspapers for obituaries that tell of women newly widowed who may have inherited money from a deceased husband or received a big life insurance payment.

After using the phone to set up a meeting, the impostors dress and groom themselves to look believable in their roles as cops or bankers. They flash badges and credentials that look real enough. And they employ the solicitous "customer relations" manner that one might expect from such officials. "He was a smooth article, and don't you think he wasn't," one victim told the Bulletin.

Scare tactics are commonly used to rattle the victim and cloud his thinking. He is told of a "problem" with his account, that it's being drained by crooked employees and he must act soon or all the money will be gone. The "bank examiners" have special tricks for those who require more persuading. Take the case of Jack Fuller (not his real name), a 92-year-old widower who lost $16,000.

The con man who called Fuller asked him to fetch his most recent bank statement and then read him a figure that exactly matched the balance. "And of course that threw me out in left field," Fuller tells a visitor to his Sarasota home. "When he read off the balance right down to the penny, I thought I was doing a good turn for the bank."

Victims assume the caller must be from the bank or he wouldn't know so much about the account. But the truth is, it's pretty easy for a criminal to get the most intimate financial data.

Authorities still think most of it comes from the victims themselves, that they unwittingly tell more than they realize to strangers over the phone.

Most banks have automated telephone information services that will reveal account details to anyone who enters the right identifying numbers into a push-button phone, says Winston-Salem Detective Bowles. "If I know your account number and the last four digits of your Social Security number," he says, "I can find out anything I want about your account."

Bankers acknowledge that some of it comes from inside sources, bank employees or computer service workers who have access to information and sell it. But there is growing concern that outsiders also are tapping in.

However persuasive these people may sound over the phone, there is one thing you can do to protect yourself. Law enforcement and bank officials universally say the best defense is to hang up before they get a chance to go to work on you.

"The point is, no policeman, no bank is ever going to tell you to take your own money out of the bank for any reason," says NationsBank's Jeter. "So, if someone calls you and asks you to withdraw money for him, you know right off it's a con."

Detective Bowles even warns against callers claiming to be police officers who ask you to call the police department to check them out. By tampering with phone lines, they can intercept the call and answer it themselves, Bowles says.

More and more banks are training their tellers to spot possible victims. But once customers enter the bank thinking the teller is a thief, it can be hard to dissuade them from withdrawing.

Milwaukee police have come up with a plan that has virtually eliminated successful bank examiner scams there. Any time an older person comes into a bank asking for a large cash withdrawal, tellers in all Milwaukee banks have a set response.

First, they turn on the surveillance cameras -- intended to capture on film the swindler who often accompanies his victim inside the bank.

Then the teller hands the customer a one-page bulletin explaining the crime and warning that perhaps he or she is being victimized. Before any money is handed over, the customer must read the advisory and sign it.

"It gives the victim what they need," says Detective Dennis Marlock. "It gives them time to think, and often that does the trick."

Yet, says bunco investigator Grow, there's only one real defense against this type of crime.

"The absolute bottom line," he says, "is if anyone asks you to withdraw cash for any reason, don't do it."

If you have been approached by a fake bank examiner, call the National Fraud Information Center at (800) 876-7060.

Copyright 1995 by the American Association of Retired Persons

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