NEW YORK (AP) ? The man who telephoned Henrietta Tolhurst several months ago claimed he had great news for her ? she had won the $22,000 second prize in a national magazine contest.

The caller said he and his company would pay the taxes, so all Tolhurst had to do was cover $6,800 in lawyer fees.

Tolhurst, an 89-year-old widow who lives in Santa Monica, California, says ?they sounded so authentic, and it got me thinking about all the good things I was going to do with the money.?

So she went to her bank and borrowed the cash against her credit card, put it into a copy of the magazine as directed and handed it over to the ?courier? who arrived at her doorstep to collect it.

Unfortunately, there was no contest, and Tolhurst has little hope of ever recovering her money from the scammers.

Tolhurst was one of thousands of elderly Americans who fall victim to securities or lottery fraud every year.

Securities fraud covers investment problems from brokers who churn stock accounts to bogus oil and gas schemes; lottery fraud is often of the ?you may already be a winner? come-on variety.

The problem has become so widespread that consumer advocacy groups and government regulators are stepping up efforts to better educate seniors about the perils so they can avoid the fraudsters.

Tolhurst, who is retired but does volunteer work with several agencies, said she is embarrassed that she was conned but has decided to share her story because she hopes it will warn others to be careful.

Mary L. Schapiro, vice chairman of NASD, the private-sector regulator of brokers based in Washington, D.C., said one of the most frightening aspects of scamming is how sophisticated the con artists have become in tailoring their pitches to the victims.

A recent study conducted for the NASD Investor Education Foundation in cooperation with the California-based WISE Senior Services agency and the AARP Foundation, found that many of the fraudsters worked hard to befriend the elderly.

?If they thought the victims were religious, they?d pray with them at the beginning of a call,? Schapiro said. ?Or they?d latch on to some other affinity, like an Italian last name. And they often dropped the names of important people who allegedly participated in their programmes.?

The study also found that contrary to expectations, investment fraud victims appeared to be more financially literate than non-victims, making them more likely to rely on their own experience in making investment decisions.

Schapiro also said investor fraud goes dramatically underreported because elderly victims not only feel silly or embarrassed that but also fear that if they acknowledge it ?people will think they?re no longer capable and they?ll lose control over their money or their lives?.

Grace Cheng Braun, president and chief executive of WISE Senior Services, a nonprofit social services agency in Santa Monica, said her group got involved with elder fraud after it began operating a telemarketing victims? call centre in 1998.

Tolhurst, who volunteers with WISE, turned to the group for support after she was the victim of the magazine scam, Cheng Braun said.

WISE trains volunteers who talk to seniors who have been scammed and try to give them advice on what to look for to avoid future problems.

Cheng Braun said she worried that even well-educated seniors were getting caught up in scams. She said, for example, that the group had helped a former bank manager who lost money in a Ponzi scheme in which the fraudster promised big returns that never materialised.

Cheng Braun also said elderly people who are scammed are hesitant to tell their families and often won?t file or press charges against the perpetrators ?because they?ve befriended them, and the seniors just can?t believe the friend would harm them?.

Patricia D. Struck, state securities administrator in Wisconsin, said seniors often are reluctant to report a scam ?because they think that if they don?t say anything, they might get their money back but if they turn the person in or talk about it, they?re definitely not going to get it back?.

Still, she said, enforcement agencies sometimes can help seniors recover some or all of their money or can shut down the illegal operations so others aren?t victimised. Struck, who also serves as president of the North American Securities Administrators Association Inc., said the group has posted a ?senior investor resource centre on its Web site www.nasaa.org that includes a variety of tips for avoiding investment fraud.

It also has links to state agencies that can help.

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