Retiree tells how credit card scheme fooled him

The cost of learning important lesson from telemarketer was $189

October 06, 2004|By Julie Bykowicz | Julie Bykowicz,SUN STAFF

Middle River resident John Knueppel considers the $189 he lost last year in a telemarketing scheme the cost of learning an important lesson, one that he shared yesterday with seniors at a Catonsville retirement community.

"The most powerful tool you have with telemarketers is hanging up the receiver," Knueppel, 69, advised about a dozen seniors at Park View Communities. "The faster you do it, the better."

Knueppel spoke as part of a Postal Inspection Service awareness campaign to prevent telemarketing fraud. The postal inspectors say people older than age 50 account for 56 percent of telemarketing fraud victims.

Postal inspectors handle many telemarketing fraud complaints because the calls are often followed by mailings, said Thomas P. Brady, inspector in charge of the Washington division.

Americans lost $40 billion last year to telemarketing schemes, Brady said. In the Washington area, postal inspectors have arrested 100 people this year on mail fraud charges, which often have a telemarketing component, he said.

Brady said telemarketers focus on seniors because they account for most of the country's wealth.

Knueppel also offered the theory that retired people are more vulnerable to the schemes because they're at home during the day to take the calls.

He said he had recently retired from the state health department when he took a call from a telemarketer promising a low-interest credit card with a $5,000 limit.

All Knueppel had to do to get the card was give the telemarketer his bank account information so that a $189 entry fee could be deducted.

Knueppel said he'd never really had credit cards, but he let his guard down with the offer because he perceived that retirement would mean money problems. And with family members in the Midwest, he wanted a credit card in case he needed to fly to see them in an emergency, he said.

"I allowed myself to listen to the spiel," he said. "I more or less dropped my defenses."

The promised credit card never came, Knueppel said, and he "just kind of wrote it off as a bad experience" until postal inspectors contacted him after finding his name on the list of a fraudulent company they'd just busted.

Schemes like the one Knueppel encountered are called "advance-fee" schemes and involve a telemarketer asking for bank account information to obtain an entry fee before a credit card is sent out.

One of the largest fraudulent telemarketing operations to be dismantled was the First Capital Consumers Group, which operated out of Toronto until charges were brought against it two years ago, said the Postal Inspection Service, which investigated First Capital along with the Federal Trade Commission.

That company targeted American consumers with poor credit histories, defrauding them of more than $8 million, Brady said.

First Capital and other fraudulent telemarketing companies often follow up their phony offers by sending customers what Brady said amounted to junk mail - not the credit cards they were promised.

Paul Schroeder, whose office was in Bel Air, was accused in a civil complaint of mailing items on behalf of First Capital and other fraudulent telemarketing companies. In August, Schroeder agreed in U.S. District Court to turn over $1.8 million in assets that will be used to make restitution to his victims, according to the Federal Trade Commission.

His mailings reached 1,000 Maryland residents, including Knueppel, Brady said.

Knueppel said he hoped his story would serve as a reminder of the old saying, "If it sounds too good to be true, it probably is."

"I'm embarrassed about it, but if I can help someone else, it's worth it," he said.

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