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Money December 2016

Dollar Sense

The Psychics Appear to Know All – But Do We Know Them?

By Teresa Ambord

If this sounds ridiculous, keep in mind, it’s been enormously successful. Federal officials say before being stopped by alert family members, some of the elderly victims were sending envelopes full of cash every week.

Even people who seem otherwise sensible sometimes fall for scams. If you think an older person who never touches a computer is relatively safe from scams, you could be wrong. Scams come in the form of snail mail, newspaper ads, phone calls (and phone ads on TV) and in person.

An enormously successful scam hit roughly 1.4 million victims in nearly every country, and it did it mostly by snail mail. It started in 1999 when “psychic” Maria Duval began sending out simple letters. Decades later, federal prosecutors can’t say if Duval is a real person, or just a front name. Regardless, in this ongoing scam, Duval has stolen more than $200 million just from victims in Canada and the United States.

How? Millions of letters were sent out each month, each of which appears to be personalized and promises guidance, for a fee, of course – usually $40. In return, the recipient gets what looks like handwritten notes, lucky numbers to use to win the lottery, and sometimes a lucky charm.

Federal officials said some of the letters they intercepted were marked with coffee stains, to add a “personal touch.”


How Does She Target Victims?

Most Duval victims are elderly, poor and sick. She (or they) purchase what is known as “sucker lists” from data brokers. Data brokers use software to comb bits of data and put it together to form a file on individuals, like you. Most of us know better than to reveal a lot of personal information on a site such as Facebook, but we might reveal a little, here and there. A favorite color, your occupation, your dog’s name. But when someone takes the time to combine the bits, there’s enough for thieves to use, especially a so-called psychic.

Duval (under another name) has also had success posting ads, directly asking people for information. Why would anyone respond? Because in exchange, they are told the information will be used to determine their lucky numbers. At some point in the future, Duval takes that information and uses it to convince a victim that there’s a psychic connection between them. If this sounds ridiculous, keep in mind, it’s been enormously successful. Federal officials say before being stopped by alert family members, some of the elderly victims were sending envelopes full of cash every week.


What about Phone Psychics?

You’ve seen the ads for psychic hotlines. You should know, most of these are staffed by out-of-work actors, people who are good at reading reactions and feigning interest in the callers. Usually these failed actors make more money on bogus psychic hotlines than they ever did in entertainment.

They start by throwing out vague statements that are general enough to hit the target in some cases, and keep the caller listening. How successful is this scam? It’s a billion dollar a year industry. They lure people in with the promise of a free first reading of a few minutes. Then they make the most of those free minutes, by throwing out intriguing statements and promising certain results, but of course not giving away too much. The idea is to hook the callers into an ongoing service. And then the charges really begin to roll up. And the psychics are careful not to say anything they can be held accountable for.

The mail scams and phone scams are atrocious. But sometimes the in-person scams are worse. Take a look at what happened to a single man named Ralph Raines who made the mistake of visiting a psychic shop one day.


The Raines Fortune Gets Clear Cut

In 2004, a psychic in Bend, Oregon, was visited by a lonely Oregon man in his late 50s. That was the beginning of a complex scam that would span a decade. Ralph Raines was the only heir to the Raines Tree Farm, worth about $15 million. He’d always been interested in the paranormal, so when he saw a psychic shop, he went inside and plunked down $10. Money had never been important to Raines, but as he talked, self-proclaimed psychic Rachel Lee was paying attention. She saw a golden opportunity to gain his trust, and then his wealth.

At one point, he told her "I wish I was married and had a family.” With that information it didn’t take long for Lee to weave a complex scam. That included a bogus marriage — which Raines thought was real — to someone who turned out to be Lee’s 17-year-old daughter in a bad wig, using a fake British accent. Lee even managed to come up with a child that Raines believed was his. It took time, but for her efforts, Lee stripped Raines of nearly his entire fortune. In the end, all that was left was a clear-cut tree farm where a majestic forest had stood.

It was only when someone near the psychic shop got suspicious of the luxury cars that Lee and her husband were driving that someone looked into what was going on in that psychic reading shop. Even after Lee and her husband and daughter were all sentenced to prison, Raines still has trouble believing his psychic friend misled him.

Could something like this happen to your elderly relatives or friends? It may seem ridiculous. But in many cases the common factor is loneliness. Seniors who live fairly isolated lives, like Ralph Raines, crave human contact. And a smart “psychic” knows how to provide that. They don’t just make the obligatory call once a week or less, but they become “best friends,” warm, caring, and they record details about the lives of victims. Then they ask, “How’s that pain in your hip? Is it better?” “How’s your daughter, Susan? Did she get the job she wanted?” and they listen and listen and record and record.

Life is busy. But keep your elderly relatives and friends close. You could be protecting them from costly and dangerous scams.


Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

Meet Teresa