Warning that phony mail order schemes have become a "vicious racket" bilking the consumer out of half a billion dollars a year, the U.S. Postal Servie yesterday announced a crackdown on fraudulent advertising.
Postmaster General William F. Bolger told a news conference the Postal Service was increasing the number of inspectors in 18 cities, including Washington, to investigate claims made for such products as quick-weight-loss plans, vacation-land sites, climbing strawberries and energy-saving gadgets.
Bolger said the use of the mails to swindle consumers "has become a vicious racket that we are greatly concerned about."
As examples of successful prosecution of such swindles Bolger offered the Worm World Inc. case of Denver, Colo. That firm sold more than $2 million in earthworm growing packages as investment opportunties, Deputy Chief Postal Inspector Kenneth H. Fletcher said. The company claimed there was a demand for earthworms that didn't exist, Fletcher said.
"Worm farms don't sound very glamorous," Fletcher said. "But $2 million was fleeced from the public."
Another problem company produced the Thera-Slim 100 Weight Loss Program, which was advertised in newspapers with color photographs of bikini clad alleged weight-losers. The ad claimed the program "burns away more fat each 24 hours than if you ran 14 miles a day," and results were documented by "a Boston Medical School."
Oddly, the Postal Service doesn't get as many complaints about fraudulent weight loss ads as other ads, Fletcher said. "People try a hundred of them and figure, 'It must be me,'" he said.
Other examples of complaints include:
Seventy-nine families allegedly swindled out of $132,000 when they purchased lots in the Tierra Del Oro Estates in Texas, land falsely touted as having high agricultural potential near an oil producing area.
One hundred persons who allegedly lost $700,000 when they bought into the Bims hamburger franchise in Dallas, a company which did not exist;
Pills and love potions promoted as effective aphrodisiacs;
A product guaranteed to "create a permanent aversion to all alcholic beverages," and
A cream falsely alleging to "quickly enlarge bustline up to five times while sleeping," as well as other breast developers.
Last year the postal service received more than 230,000 complaints, Fletcher said, of which 5,724 investigations were completed and 2,012 convictions were obtained. The more common frauds are chain letter plans, fake contests, investment schemes, home improvements, retirement homes and a whole new area created by concern for energy -- phony energy related gadgets, Fletcher said.
Eighteen fraud inspectors will be taken from other postal investigation areas such as burglary and mail theft -- crimes which have decreased recently, Fletcher said.
There has also been an upturn in fraudulent schemes involving alleged precious gems and coins, and even "chinchilla breeding has popped up again," Fletcher said.
"There's been a 20 percent increase in these," Fletcher said.
Because of the current economic situation, Fletcher conjectured, some persons may get involved in the schemes to supplement their incomes or as an inflation hedge.
Others are interested in saving gasoline so they'd rather shop by mail than drive to stores. Those hardest hit by con persons are the aged and the poor, Fletcher added.
Fletcher said investigations show that the frauds are perpetrated by a handful of persons who change names, companies and locations sometimes overnight. Most mail order companies are reputable, he emphasized.
However, Fletcher and Bolger seemed unclear as to how consumers can tell the bad guys from the good guys.