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Be Aware Of Cross-Border Scams

If you think you are immune to scams operating outside the U.S., think again. CBS This Morning Consumer Correspondent Herb Weisbaum reports on how more and more scams - from Canada - target Americans.

It used to be that mail and phone scams were pretty much home grown operations - made in the USA. Con artists tended to hang out in places like California, Nevada, and Florida. And a lot of them still do. But increasingly, Americans are losing money to fraudulent companies operating from up north.

Working in cities across Canada from Vancouver to Montreal, they pitch all sorts of scams, from bogus loan deals to phony credit repair.

At one telephone sales room in Vancouver, British Columbia, we found callers pitching foreign lottery tickets - sold in packages costing hundreds of dollars.

These callers start by asking for some general information. But before long they go for the money:

"Now on the entry form you checked off that you have a major credit card. Would that be MasterCard or Visa or both?"

Chuck Harwood is with the Federal Trade Commission:
"Well, they want to know about your financial background, because they want to know how much money they can charge you. The amount they will try to charge you is gonna be based on how much they think you have."

The smooth-talking sales people all but guarantee big winnings. Those who fall for the pitch say its mighty convincing.

One cross-border scam victim is Bonnie Boyer:
"It's funny how you can feel so stupid after you've gotten sucked into something like this, but at the time it didn't seem so unreasonable."

Boyer, who lives in Bremerton, Washington took the bait, and not just once. She played foreign lottery games again and again over a period of two years - and never won anything.
How much did they take her for?
"Whew!" Boyer exclaimed, "Probably pretty close to $2,000."

And believe it or not, Bonnie Boyer could be considered lucky. Most victims lost a whole lot more.

James Bordenet is a U.S. postal inspector:
"In many cases, the promoters actually took everything that these seniors had."

So if their victims are here in America, why are the scammers setting up shop in Canada? The answer is simple: because it's harder for U.S. authorities, like the Federal Trade Commission, to go after them up there.

"When you're in Canada," says Harwood, "U.S. laws don't apply to them. It's harder for us to catch them; it's harder for us to arrest them."

Law enforcement has made some dents in this flood of cross-border crime. During the last few years, U.S. postal inspectors have seized millions of illegal mailings from north of the border - sending them to recycling plants instead of American mailboxes.

Thisummer, the FTC intercepted and returned $50,000 in uncashed checks to Americans who fell for a Canadian-based loan scam.

In August, U.S. authorities won their biggest victory so far in their battle with cross-border criminals when lottery telemarketer Blair Down pleaded guilty to violating U.S. laws. Down agreed to spend 6 months in jail - and return nearly $12 million to his victims.

Monte Opsata lost more than $80,000 to Blair Down. Monte, now 94, was there the day Down made his plea: "He's getting off real easy. I think he's a real stinker. And that's saying it as nice as I can."

So even though they've put Blair Down out of business, clearly there have got to be others up in Canada still doing the same thing. According to Bordenet, "They are up there, and they're running. As we're talking, they're calling."

The sad thing about this kind of scam is that most of the victims are elderly, and the losses tend to be high. In the Blair Down case, for instance, postal inspectors say the average age of the victims was 74, and the average loss was $50,000.
Believe it or not, word of the restitution has spawned another scam. Con artists are now calling victims in this case, claiming to be working with the authorities and claiming to have money to return. All the victim has to do is send in a check to cover expenses. Don't do it! When the real authorities do give back the money, they won't charge anybody anything.

To protect yourself, remember that it's illegal to play foreign lotteries through the mail, so don't do it. Then just follow these simple rules:

  • Never pay money up front for a loan.
  • Never pay money up front to get your credit history repaired.
  • Never pay money to claim a prize.
It's that simple!

By Herb Weisbaum
©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed

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