State tries to foil fraud

Posted: Monday, March 20, 2006

Many see Alaska as a great place to retire, and Alaskans of all ages enjoy the quiet of the state’s small rural communities. These are two of the factors that have made the state popular for scam artists, and the Alaska Department of Commerce, Community and Economic Development has streamlined fraud monitoring procedures to deal with the problem.

Mark Davis, the deputy director of the department, told the Soldotna Chamber of Commerce on Tuesday that a hotline now lets Alaskans phone in questions about deals that seem “too good to be true” and report fraudulent behavior.

“Unfortunately, we have an epidemic of fraud across the whole United States,” Davis said.

Phone, mail and e-mail solicitors who ask for account information or Social Security numbers should always be considered suspicious, he said, but until two years ago, the department did not coordinate with the Alaska and U.S. attorney generals in monitoring and gathering information on such suspicious solicitation.

That started to change in 2003. Since then, the department has formed a database of fraud reports. Two lawyers were hired to prosecute purveyors of insurance fraud and the hotline is staffed with operators who can tell callers if the offers they receive are legit.

The hotline fields certain calls over and over again. Seniors, for example, are twice as likely to fall victim to fraud, with 49 percent of all reported senior fraud cases dealing with medical product and service scams.

E-mail spammers and telemarketers tend to prey more on rural Alaskans who may be unaware of the fraud epidemic. Canadian scam artists can fly under the radar, Davis said, because Canada has no Securities and Exchange Commission to keep track of predatory practices.

“Those sparsely populated areas are often very susceptible to telemarketing fraud,” Davis said. “In these areas, people use the Internet for business, and unfortunately, the bad guys figured that out.”

Predatory lending, insurance and lottery scams figure prominently into hotline calls, but investment deals also are on the rise. In most cases, securities dealers register themselves and their products with the commerce department’s Division of Banking and Securities, so asking a caller if the securities offered are registered in Alaska is one quick way of ferret out fraud.

“Many times they just hang up,” Davis said. “There are between 46,000 and 50,000 broker dealers registered to sell in Alaska. Between 50,000 dealers you could probably find someone to sell you something. It’s something to consider, do you really wanna give somebody some money if they’re not registered?”

Predatory lenders will sometimes say they are with your bank. There is another easy tactic to find out if they really represents your bank: ask them to mail you a letter, but don’t give them your address.

“If you’re really a customer, they have your address — they know where you are,” he said. The toll-free hotline is open Monday through Friday from 8 a.m. to 4:30 p.m. at (888) 925-2521. A wide variety of resources on fraud prevention also are available at the department’s Web site at

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