If you're a con artist desperately trying to convince a consumer that they've really won $1.5 million in a sweepstakes, why not put a government "authority" on the line to confirm that it's all true?
A man in his 70s in Washington state "heard" from Stacy Canan, who leads the Office for Older Americans at the Consumer Financial Protection Bureau in Washington, D.C.
Except it wasn't Stacy Canan. But the man didn't learn the truth until after he had wired some $50,000 up front to cover taxes on the sweepstakes money that wasn't real, either.
The con artists are going to great lengths to falsely use the names of big companies, like DTE Energy; big government agencies, like the Internal Revenue Service; and now even real people's names, like Canan's, that might be easily Googled to seem real.
It's all part of the plan to make the pitch seem as legitimate as possible in order to persuade someone that it's wise to wire money up front to collect on a sweepstakes. Or put cash on a GreenDot debit card to pay old heat or electric bills when a caller demands cash on the spot. And sure, put money on an iTunes card to pay off the IRS.
DTE Energy and other utilities are warning consumers this winter about a rash of bill-collecting impostors who are so sophisticated that somehow their bogus callback numbers even include recorded greetings and prompts that sound like DTE's real customer service line.
The energy bill scam often focuses mainly on businesses in a given area on a given day -- local restaurants, auto repair shops, hair salons and the like.
"They always use what I call an artificial deadline to pressure you," said Michael Lynch, director and chief security officer for DTE Energy in Detroit.
"They'll always say the truck is on the way to shut you off."
Mary Plaza, 52, a manager for Down River Body Works in Allen Park, ended up taking $980 to a Kroger last July to pay the bill for the auto repair shop after some scammers convinced the owner that the gas would otherwise be turned off soon.
The amount of the bill didn't seem outrageous for the business since some of its bills can be around $2,400 a month.
The story line the scammer used involved something about DTE claiming that the account numbers for the business had changed and some payments weren't made.
The caller created a do-it-now-or-else sense of urgency.
"If you don't pay it, we're sending a truck to shut off the gas," Plaza recalled the callers saying.
Plaza said gas is needed as part of the paint process to repair cars.
"Our business is huge. If anything is shut down here, I'm in trouble," she said.
She bought GreenDot prepaid cards, scratched off the back to reveal a number on the back of the card and then read that number to the person on the phone. The money is gone when the scammers immediately transfer the cash to another account to access the money at an ATM or spend it online.
Plaza isn't the only victim to fall for this one, either.
A Farmington Hills business lost $19,000 in January after scammers pretending to be from DTE called and threatened to shut off power.
Farmington Hills Police Department Assistant Chief Daniel Rodriguez said the money was put on 39 GreenDot cards after the threats were taken seriously. The investigation is ongoing.
Rodriguez said one of the biggest red flags should be any time a bill collector demands that you put money on a GreenDot or other prepaid card. Legitimate companies aren't doing that, he said.
In some cases, the maximum amount you can put on a prepaid card is $500. So a consumer or business could be asked to buy several prepaid debit cards to pay the back-due bills.
In some cases, clerks at stores like Rite Aid have warned consumers too by asking why they're putting so much money on Green Dot MoneyPak cards or iTunes cards.
Alarm bells should ring any time, too, when the caller on the other line says says a crew is on the way to shut off service unless you pay up. DTE isn't going to do that.
DTE said about 200 people were scammed last year by fake bill collectors pretending to be from the utility, and customers lost a total of about $120,000.
Why are the con artists going after small business owners?
Lynch at DTE said some information for a business easily can be found online. A little bit more information can be picked up with an initial phone call to make the fake collectors sound even more legitimate.
In some cases, they might have an actual amount owed by the business.
"It depends on how much information they've been able to acquire before they make the call," Lynch said.
What consumers need to realize, of course, is that scammers are upping their game to sound more convincing.
Elderly consumers may be targeted, for example, because they could have a good deal in savings -- money that could easily be wired to take care of "upfront taxes" on a sweepstakes prize.
In some cases, authorities report that scammers say their company represents the federal government. The "winner" must wire or transfer a sum of money to a cover tax or surcharge to claim the prize.
Some times, scammers pretend to be from "Publishers Clearing House." A few years ago, I wrote about a call my sister received claiming she won $3.5 million. All she had to do was pay $99.99 via a wire transfer within the next 45 minutes.
Now, it appears, the scammers promising the big sweepstakes cash want to trick you by claiming to be someone you'd likely trust, too.
"While it's true that I lead the CFPB's Office for Older Americans, I do not have access to lists or records of sweepstakes winners, nor do my colleagues," Canan wrote in an online blog.
Canan told me that she first heard of scammers using her name in late December when she got a call from an attorney in New Jersey who said his clients were trying to confirm that they won a sweepstakes.
A lot of people were contacting the couple to offer proof that they had won -- and they should wire money in advance to cover the taxes. They were told that someone from the Consumer Financial Protection Bureau could confirm the prize.
Then, early this year, the real Canan received a phone call from the man from Washington state.
"He said, 'Do you remember talking with me?'"
He then went on to tell Canan that he had talked with her on the phone several times. She told him the prize was legitimate, he said. He had talked with attorneys, brokers and others, too, before agreeing to wire the money for the taxes.
When he didn't get the prize money, he called some of the phone numbers for those experts. All the numbers were disconnected. So he went online, found her name and was happy to discover that she really was real.
"I said 'Yes, I know I'm real. But unfortunately, the person you talked to was not me,'" she said.
"It was a very hard conversation to have with him," Canan said.
About The Writer
Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at firstname.lastname@example.org.
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