Prosecutors from the USA have laid a series of fraud-related charges against 11 citizens of the Dominican Republic who allegedly operated call centers that tricked elderly Americans into making payments they believed would help a younger relative in need. Hundreds of Americans were defrauded, with the result that they collectively lost millions of dollars. A further five men living in New York were also charged with acting as couriers who collected money from victims and transferred it to their peers in the Dominican Republic.
The so-called ‘grandparent scam’ followed a well-established pattern.
- A scammer in a call center telephones a target in the USA and pretends to be their grandchild or another relative. Calls were spoofed to appear as if they originated within the USA. The target is told that the grandchild has been in an accident, has been arrested, or otherwise needs urgent help.
- When the victim is convinced they have spoken to a member of their family, they are then passed on to a different scammer in the call center, who pretends to work as a lawyer or law enforcement officer. This scammer instructs the victim to provide money with the excuse that it will be used to assist the relative or secure their release from jail.
- Couriers visited the homes of victims and collected cash in person, providing fake receipts in return. On other occasions, victims were told to send cash through the post.
It is good to see police and prosecutors going after phone scammers based in foreign countries, although they chose to say nothing about whether or when the Dominicans might be extradited. On the other hand, this case is also an indictment of the fundamentally flawed US strategy for tackling the manipulation of CLIs. Either these scammers spoofed CLIs to present US area codes, or they used a device like a GSM gateway that was located within the USA and which connected the international leg of each call to another call that originated on a US network. The viability of both techniques illustrates how the USA has wasted half a billion dollars on CLI validation methods that remain essentially worthless.
The Department of Justice press release can be found here.
