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                                       politics + culture

Sunday, May 20, 2007

Telemarketing Fraud: data mining corporations enable scam artists

Charles Duhigg tells an infuriating story in today's New York Times: 92-year-old Iowan Richard Guthrie was bilked of his life savings and his financial independence by con artists who used phone lists provided by one large corporation and then repeatedly cashed fraudulent checks at another. What's worse, both corporations that Duhigg reports on, InfoUSA, a company that compiles list of consumers for resale, and Wachovia Bank, the nation's fourth-largest banking institution, did not cease to enable the criminal telemarketers defrauding Mr. Guthrie even after government authorities warned them of what was going on.

In fact, in the case of InfoUSA Duhigg reveals that federal regulators indicated, "InfoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers."

From the NYT:

InfoUSA advertised lists of “Elderly Opportunity Seekers,” 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”

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.

"Only one kind of customer wants to buy lists of seniors interested in lotteries and sweepstakes: criminals,” said Sgt. Yves Leblanc of the Royal Canadian Mounted Police. “If someone advertises a list by saying it contains gullible or elderly people, it’s like putting out a sign saying ‘Thieves welcome here.’”

Now our Department of Justice is supposed to protect us from just this sort of criminal activity. Given the news lately, however, it's hard to believe that Attorney General Alberto Gonzales has been devoting all that much time to Operation Senior Sentinel.

More to the point, the government's own collaboration with private industry in the widespread data mining of United States citizens creates a situation where there's an apparent a motive to keep this issue quiet on the US Government's part as well:

Legal changes after 9/11 allowed the FBI and other intelligence agencies to move aggressively to access the vast oceans of information aggregated by commercial vendors. The data titans, ChoicePoint, Acxiom and LexisNexis, offer not only access to data -- everything from ordinary public records to personal spending habits -- but also increasingly sell analytic technologies to the feds to help them make sense of the vast amount of information out there.

These private data companies aren't exactly eager to talk much about what they're coughing up to the government.[...] The reality is that selling data and data-mining services to the government has become a post-9/11 cash cow for these big data companies, particularly Acxiom and LexisNexis, who are making bundles off the feds' increasing efforts to tap into information pipelines and warehouses.

-PBS Frontline Spying on the Home Front

Charles Duhigg's reporting in today's New York Times deserves to be read in its entirety.

The issues Duhigg raises, however, about corporate misuse of private data and indifference to fraud perpetrated against vulnerable citizens indicate a deeper conflict. In fact, given how little we know about our own government's collaboration with private data miners and large communications providers, it is reasonable to ask if there isn't some inherent conflict of interest obstructing the public's right to know and be protected from those who would abuse our private and personal information, whomever they might be.



  • Contrast the Canadian government's website to fight Telemarketing Fraud with that of the FBI: it's pretty clear that the U.S. Dept. of Justice has work to do.

    I can't imagine that FBI site would be very useful to elederly citizens or those looking to assist them.

    By Blogger kid oakland, at 6:03 PM  

  • Well I agree that crime agianst the elderly is tragic so is the crime agianst firms that service the elderly and when the work is done they call foul and the police and the poor sap that just worked all day gets charged with fraud just becaues the elderly person says "I am to old did not understand they took advantage " bull I say if a person elderly or young does not have the capacity to think then they should be in a home

    By Blogger andy6499, at 7:38 PM  

  • Andy, let me guess. With all that compassion, you must be a Republican.

    By Anonymous Anonymous, at 12:02 AM  

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