"Scam: How con men use the telephone to steal your money" by Harold Coyne (Duckworth, 211 pages, £14.95).
Review by Robert Dawson.
This entertaining expose of telephone sales fraud is in the finest poacher-turned-gamekeeper tradition. Having retired from a successful career in American boiler rooms (so called after the basement boilers that phone men gathered round in the 1920s), Harold Coyne recycles his experiences into ammunition to blow the lid off this $10 billion-a-year industry.
To the star telefraudster each call is a performance. Into it he projects every ounce of his personality. To appreciate the power which he holds over his victim (female fraudsters are rare but usually devastating), it is first necessary to understand the medium. This is an area which Coyne covers well, with the aid of interviews and reproduced sales spiels.
Telephone selling is renowned as the hardest form to master, but offers the successful practitioner unrivalled opportunities for deception. These range from simple devices like the collect call system - which enabled one swindler to continue his antics from a prison cell - to elaborate charades involving ingenious special effects. For example, there is the helpful colleague clicking a stapler to simulate a teletype giving up-to-the-minute market prices. My favourite is the salesman who used to put his head in a drawer to re-create the echo of a gold bullion vault while giving his clients a guided tour of the depository in which their investments were supposedly lodged.
Gems, metals, oil, commodities, penny stocks, dubious dating services, holiday frauds ... Coyne covers the lot. All of these abuses originated in the United States, but there is every reason to believe that the tricksters have now turned their attention to this side of the pond. European integration is the con man's dream, offering an untapped market with excellent communications, plus a web of languages along with national boundaries and laws to help cover his tracks. Where, for example, will an Italian victim seek redress from a Canadian company based in Amsterdam with a bank account in Liechtenstein and a sales team operating out of Barcelona? By the time that the authorities have unravelled the facts the boiler room will have disappeared in steam.
In Britain the con men have been quick to catch on. Timeshare sharks have long been a scourge of the holiday industry. And there are signs that home-built boiler rooms are matching their Florida counterparts. Old Bailey judges were shocked, at a recent trial, to hear about the sales practices of a commodity futures company. These included pinning incentive money to the walls, and removing the chairs from salesmen who were not considered to be generating enough business. While clients lost money hand over fist, the firm made a £3 million profit.
Coyne is fully aware of the intelligent reader's response to all of this: that none of it would happen to him. The media stereotype of the little old lady done out of her savings is actually harmful, he points out. The old lady's misfortunes undoubtedly represent an extreme example of the pernicious consequences of telephone fraud, but unfortunately she helps to breed an atmosphere of complacency. Victims come from all walks of life: doctors, lawyers, investment analysts. Even financial sophisticates like the notorious Hunt brothers, the Texas oil family which once came close to cornering the world market in silver, have fallen for seductive patter.
Most people who have been duped are reluctant to admit what has happened, even to themselves. And the temptation to throw good money after bad in an attempt to recoup losses is a psychological phenomenon that the con man ruthlessly exploits. The results can be tragic. A New York minister committed suicide after being conned in a deferred delivery gold scam in which he had unwittingly involved some of his poorer parishioners.
Coyne's depressing conclusion is that white collar crime pays. A combination of government apathy, under-resourcing and demarcation disputes between agencies has rendered the US regulatory machinery useless, and in Europe the situation seems no better. The author's expressed intention - as a token of apology to his erstwhile victims - is "to forewarn and forearm". At £14.95, believe me, sir, this is an opportunity which you cannot afford to ignore.
(Robert Dawson is a freelance writer.)