THE GOODS : Smooth Operators : Crafty telephone crooks are bilking Americans out of billions by promising deals too good to be true. But if you know the scams, you can avoid being a victim

Earlier this year when a San Francisco widow in her 80s went to her tax preparer, she brought along a grocery bag filled with $17,500 worth of canceled checks for 1993. All were written to slick-talking telemarketers who had sold her fraudulent investments, not-so-free sweepstakes winnings, and vacations and products that were supposed to be valuable.

Among the “big” prizes were two 19-inch TV sets that cost her $2,000, plaques, boxes of pens and pencils, cheap jewelry, Christmas ornaments, cleaning products, health and beauty supplies, stackable frying pans that lost their handles when she tried to use them, and almost 100 boxes of yellow Frisbees imprinted, ironically enough, with the Nancy Reagan anti-drug slogan, “Just Say No.”

Ironic, because “no” is exactly what fraud experts counsel the woman should have said to the flim-flam phone artists in the first place.

Instead, she became a big-time victim of telemarketing fraud--what Federal Trade Commission officials call “the plague of the 1990s marketplace” and the fastest-growing consumer fraud in the United States.

Each year, millions of Americans, especially senior citizens, are bilked out of an estimated $40 billion nationwide by crafty telephone crooks pitching endless schemes.

Or asking for contributions to organizations that sound legitimate but don’t exist.

Or sending a postcard that says: “You’ve won one of these five prizes, but you must call this 900 number.” That phone call usually costs the caller $3 a minute.

The telemarketing scam problem is so severe that special federal task forces have been set up across the country to try to combat it. State attorney generals and corporation commissions have telemarketing investigators trying to cope with burgeoning complaints.

The National Fraud Information Center (NFIC), a project of the National Consumers League in Washington, D.C., operates a 24-hour national fraud hot line for consumers to report telemarketing fraud. That toll-free number, (800) 876-7060, gets about 250 calls a day, said NFIC Director John Barker.

In a new effort to educate consumers about telemarketing fraud, the NFIC, in conjunction with MasterCard International, has recently launched a national TV campaign, “Know the difference. Hang up on fraud.”

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Anyone with a telephone and a mailing address can be a victim of telemarketing fraud, but fraud investigators agree that the most likely prey are senior citizens.

“Generally, the No. 1 target is the elderly,” said Scott Stapf, investor education adviser for the North American Securities Administrators Assn., an association of state securities regulators. Stapf calls this targeting of the elderly “the Willie Sutton effect. When asked why he robbed banks, Sutton said, ‘because that’s where the money is.’ And the older generation has money to invest.”

Stapf said merchandise scams are rampant, but they don’t generate as large a loss as fraudulent investments. “Just in securities scams, the estimated losses are $1 million an hour nationwide,” he said, explaining that much of that loss comes from people in their 60s, 70s and 80s.

The “largest dollar amount of telemarketing fraud comes from the elderly,” said Karen Silva of the Arizona Corporation Commission’s Securities Division. “And many are looking for alternative resources to build up their bank accounts since there are no longer high rates on CDs or money markets. Many are concerned they’re going to run out of money.”

Fraud experts also agree that several factors can make older people especially easy targets for telemarketing scammers. Senior citizens often live alone, have no family near them, and are lonely and/or in poor health. They enjoy people paying attention to them, calling on the telephone.

“Older people (tend to be) more trusting and more polite, and they don’t hang up on people,” said Dale Sekovich, senior investigator of telemarketing fraud for the Los Angeles office of the FTC. “Older women living alone are special targets. I’ve had victims say ‘The guy called me every day, sent me cards and flowers. I felt like he was a son.’ ”

Seniors also make up a larger proportion of the population today--there are an estimated 55 million senior citizens in the United States--so there are more to be victimized, said John Bordenet, a fraud expert with the American Assn. of Retired Persons criminal justice services section.

“Older people have more traditional values,” Bordenet said. “But they also fool themselves into thinking that their long life experience will protect them and they’ll be able to recognize a scam.”

Bordenet added that telemarketing crooks have told him that is why “they recruit young people to make the phone calls. The older person is all the more likely to feel self-assured when talking to someone so young.”

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The latest form of telemarketing fraud involves bogus stock investments peddled through computer bulletin boards.

“A regular boiler room (the nickname for a telemarketing scam operation) can make 150 calls on a good day,” said Arizona’s Silva. “Through computer bulletin boards like Internet, Prodigy, Compuserve or America Online, they can contact thousands of people a day. They’ll pitch the XYZ company, saying the stock looks cheap, but it’s going global. Then people think, ‘That sounds like a good deal, I’d better get in.’

“Then the person who put the message out--he purchased the stock at $2--gets the stock up to $10 or $12 and he’s out. It is very hard to trace them, because they can use aliases or the message can come from Japan because it’s global.”

Silva praised the potential of computer networking to educate people and help them become smarter investors, but warned consumers to beware that rip-off artists will be on-line too.

“The trick is consumer education,” she said. “That is such an important part, so we can stop it at the beginning.”

Although cyberspace scams are increasing as more Americans join the information superhighway from their homes, the majority of telemarketing fraud is still perpetuated on the telephone or through the mail.

Most victims who lose money to telemarketing fraud “never get a penny back,” the FTC’s Sekovich said.

And fraud victims can lose even more money if they fall prey to reload or recovery scams, said Jerry Smilowitz, a deputy attorney general in the Los Angeles office of the California attorney general.

Smilowitz said Southern California is experiencing an upswing in reload and recovery fraud.

A reload scam is when the same group that earlier bilked a consumer calls back every 30 to 60 to 90 days to get more money, he explained.

A recovery scam is when one phony company already has defrauded a consumer, then sells his or her name to another scammer who calls and offers to get the lost cash back for a fee of $1,000 or more.

“These people buy lead lists from companies, then call the victims and say they had been contacted by the federal government to help them get their money back,” the FTC’s Sekovich said. “We had one that had a list of names of older women who had recently collected on life insurance policies.”