U.S., Canada Team Up To Fight Telemarketing Fraud Schemes Cost Canadian, American Victims As Much As $40 Billion A Year

A joint program to combat telemarketing fraud was announced Thursday by U.S. and Canadian officials, who said such schemes cost citizens of the two nations as much as $40 billion a year.

“Telemarketing fraud has become one of the most pervasive and problematic forms of white-collar crime in Canada and the United States,” said a report prepared for President Clinton and Canadian Prime Minister Jean Chretien.

“Losses to each victim run from hundreds to thousands of dollars, and in some cases to much more,” it explained. “A single offender can easily earn several hundred thousand dollars per year, with larger ‘boiler room’ operations extracting tens of millions of dollars.”

“Senior citizens in both countries are overrepresented among victims and offenders have admitted to targeting them specifically,” the report noted. “The evidence indicates that offenders believe older people have more assets and are more susceptible to techniques such as excitement tactics or appeals to altruism.”

In recent years, the report said, the use of telephones has enabled criminals to target victims at long distances and across provincial, state and international borders, making binational cooperation particularly important.

Clinton and Chretien discussed the problem during their April 8 summit and subsequently ordered a group to recommend ways to address it. The group included law enforcement and policy officials from both federal governments and state and provincial agencies.

Many of the report’s recommendations involve improving, strengthening and coordinating enforcement efforts. But they also stress the need of educational materials and strategies to help people from being lured into fraudulent schemes.

Binational strategies also are needed, it said, to enable quick reaction to telemarketing offenses; combine prevention, enforcement and punishment; make strategies cost-effective; safeguard victims’ interests; maintain flexibility; and retain a long-term commitment to the problem.

Specific recommendations included exploring the legal and technical potential and limits of electronic surveillance and examining the possibility of denying telephone services to offenders.

The report also suggested examination of extradition arrangements and a review of deportation laws that might apply to foreign nationals engaging in telemarketing fraud.

A binational group is needed, it added, to serve as an overall coordinator and deal with national and binational fraud issues as they arise.