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"Grandparent scam" explained: What you need to know

Preying on grandparents: Former con artist explains scam targeting elderly 05:54

In a CBS News investigation, an admitted con artist has revealed how a scam targets and steals money from grandparents.

The scam begins with something most grandparents don't get enough of -- a phone call from a grandchild -- or so the caller says. But it almost always ends with a desperate plea for money, and the criminal CBS News met used to be on the other end of the line.

Shackled, and in federal custody, the 31-year-old conman is awaiting sentencing in California for his role in what's known as the "grandparent scam."

He agreed to let CBS News in on how he did it, but only if we wouldn't reveal his name.

The former scammer told CBS News' Carter Evans, "You can make $10,000 sometimes in a day if you do it properly."

Part of elaborate scheme run out of Canada. He would call senior citizens in the U.S., impersonating a grandchild in distress, begging for cash.

Asked how a typical call would go, he said, "You just say, 'Hey, how are you, hi grandma, hi grandpa... I'm in a little bit of trouble right now. If I tell you, just keep it between us, I'm on vacation, but I got into a little accident, and I was arrested for a DUI.' You tell them, 'Things got out of control, and I need you to send me the money."

So how many people would fall for it? "One out of 50 maybe," he said.

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A former scammer tells CBS News' Carter Evans how he duped grandparents into sending him money. CBS
It's estimated senior citizens are robbed of roughly $3 billion a year in financial scams. Phone scams are often run outside the U.S. Con artists usually buy their victims' personal information online, including age and income.

"We target people over the age of 65, mainly, because they're more gullible," the former scammer said. "They're at home. They're more accessible. Once you get them emotionally involved, then they'll do anything for you, basically."

Doug Shadel of AARP said, "We've had doctors and lawyers fall for this. It doesn't matter what your educational level is because it triggers something emotional, it causes you to act."

It happened to an 81-year-old grandmother who told CBS News, "I was upset, sort of frantic and, of course, sort of shocked."

She was home alone in California last September when her phone rang. The caller said he was her 29-year-old grandson, arrested for drunk driving in North Carolina.

She said, "I felt there was a desperation and an urgency in his voice, partly because he said 'love you'."

Asked if it sounded liker her grandson, she said, "No, but he said he had a broken nose."

"I just wanted him to be home with his family," she added. "That's all I wanted."

So she immediately sent almost $18,000 to a bank account in North Carolina, thinking it was going to a lawyer. But her grandson wasn't in jail and wasn't in North Carolina. Her money was gone. CBS News dialed the number of the person who called her. It's now disconnected.

The grandmother said, "You are blinded by emotion. Totally blinded. You don't think rationally when this happens. You know, your family comes first."

Assistant U.S. Attorney Ellyn Lindsey prosecuted the scammer CBS News met.

"The effect on the victims is so great. It's not simply the loss of the money. They feel stupid, they fell gullible, and they have nightmares about it and anxiety and depression," she said.

Asked what drove him to take advantage of grandparents, the scammer said "I didn't know how much pain this was causing people. ... I thought people, you know, who were making $100,000 a year, and they would lose a couple thousand here and there. ... I mean, people lose money all the time."

And in most cases, they never get it back.

So what did the scammer do with the money? He said he spent most of it.

Lindsey said, "I think he recognizes now it's a despicable thing that he did. And he's doing the right thing in trying to get the word out. He also knows that this will be a factor considered by the judge at his sentencing. But if you ask me, what he's most sorry about, is getting caught."

Asked if he feels remorse, the man said, "Of course. Wouldn't you?"

It's hard to tell how many senior citizens have been scammed like this, because there is no national database to track the grandparent scam and many grandparents are so embarrassed to report it to police. It's also very hard to catch these criminals, especially when they're operating outside the U.S. Also, their tactics can be highly sophisticated, such as disguising their phone numbers with a familiar number.

The former scammer told Evans that in order to guard against this kind of act, people should ask a question that only your grandchild would know, such as the name of your pet, and confide in someone -- even though the person on the other end of the line will beg you to keep it a secret.

Editor's note: To file a complaint with The Federal Trade Commission, go to www.ftc.gov where you can fill out an online complaint form. You can also call the FTC at 1-877-382-4357 to report a complaint.

You can also report a scam to the AARP Fraud Watch Network which connects you to the latest information about scams and fraud so you can safeguard your personal information and your pocketbook. You can also receive fraud alerts. Go to: www.aarp.org/fraudwatchnetwork or contact the AARP Foundation Fraud Fighter Call Center at 1-800-646-2283. You do not need to be an AARP member to join.

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