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Minnesota: Could a State Restitution Fund Help Fraud Victims?


In 2020, scammers stole more than $110,000 from a Hennepin County couple in their 80s—clearing out their bank accounts and an inheritance—with claims of a multimillion-dollar sweepstakes win. The catch: They had to pay taxes up front to get the prize money.

The thieves kept the couple on the phone for hours—talking about whatever they wanted—“to win over their hearts and trust,” says their son, who asked to remain anonymous to protect his parents’ privacy. At the end of each call, he says, “They’d say, ‘God bless you.’ ”

He filed a report with the local police department, but more than three years later, the perpetrators remain unidentified—and the money was never recouped.

AARP Minnesota is hoping to help such fraud victims get some of their money back. In the current legislative session, AARP is pressing state lawmakers to pass a bill that would create a state-level restitution fund for fraud victims who would otherwise have no recourse. It would be run by the state attorney general’s office.

“It’s an idea we completely support,” says Minnesota Deputy Attorney General Jessica Whitney. She says such a fund is particularly vital in cases where the perpetrator is overseas or bankrupt.

According to the Federal Trade Commission, Americans reported 2.5 million cases of fraud in 2022—from fake sweepstakes to romance scams. Total losses for the year reached $9 billion.

“Incidents of fraud have really exploded in recent years,” says Mary Jo George, AARP Minnesota’s state advocacy director. “Education is critical, but we need more tools to get ahead of this.”

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Graphic: Nicolas Rapp

A victims restitution fund could be particularly important in helping older people who are no longer working recover financially, she says. As envisioned, money for the state restitution fund would come from civil penalty payments from other consumer fraud enforcement cases won by the attorney general’s office.

Currently, excess money from these cases goes into the state’s general fund. The surplus amount varies depending on annual caseloads and outcomes. It could be nothing one year and millions of dollars in another, but overall is “a not insubstantial amount,” according to University of Minnesota law professor Prentiss Cox, a consultant to AARP on consumer protection law.

At least six states have created some form of state-level restitution for victims of investment frauds and scams, an idea AARP is advocating for in more states, says Chad Mullen, AARP’s national director of financial security.

The federal Consumer Financial Protection Bureau runs a civil penalty fund for victims of deceptive or unfair business practices. If a person or company is penalized but the money taken illegally cannot be located and returned, the CFPB’s fund can compensate victims. But Whitney notes it applies only to cases the CFPB is involved with.

Predatory contracts?

Another legislative priority for AARP this year is ending long-term real estate contracts that consumer advocates consider predatory and misleading.

The contracts surfaced in the Twin Cities metro area in 2021, when Florida-based MV Realty began offering homeowners quick cash in exchange for the future right to sell their property. MV promotes its upfront payments, which run from $300 to $5,000, as a “loan alternative.”

The contracts bind homeowners for 40 years—giving MV the exclusive right to sell the property or to collect a steep fee if the homeowner uses a different agent. MV, which did not respond to requests for comment from the Bulletin, filed for Chapter 11 bankruptcy last September. Before that, the company executed hundreds of agreements in Minnesota.

AARP wants state legislators to ban such contracts. Sixteen other states have already passed bills doing so, based on model legislation developed by AARP and other groups. Such contracts “prey on older homeowners and people in lower-income neighborhoods,” George says.

To learn more and get involved, go to

Sarah Hollander, a freelance writer and former daily newspaper reporter in Cleveland, has written for the AARP Bulletin for 15 years.

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