It's like clockwork. You sit down to dinner and the phone rings. You answer it. The caller is trying to sell you something or tell you that you've won a fabulous prize. If you're tempted by the offer, get the facts. If you don't, you may be in for a fraud.
Although most phone sales pitches are made on behalf of legitimate organizations offering genuine products and services, many sales calls are frauds. Consumers lose billions of dollars a year to telemarketing fraud. That's why the Federal Trade Commission (FTC) encourages you to be skeptical when you hear a phone solicitation and to be aware of a law — the Telemarketing Sales Rule — that can help you protect yourself from abusive or deceptive telemarketers.
The heart of a fraudulent telemarketing operation is usually a "boiler room," where seasoned operators try to scam hundreds of thousands of people across the country every day. Telephone fraud knows no race, ethnic, gender, age, education or income barriers. Anyone with a phone can be victimized by telemarketing scam artists.
Cold Calls. Scammers may get your number from a telephone directory, a mailing list or what fraudsters call a "sucker list." Sucker lists contain information about people who have responded to previous telemarketing solicitations, like their name, phone number, and how much money they spent. The lists are bought and sold by promoters. They are invaluable to scam artists, who believe that consumers who have been deceived once are vulnerable to additional scams.
Direct Mail. You may get a letter or postcard saying you've won a prize or a contest. This often is a front for a scam. The instructions tell you to respond to the promoter with certain information. If you do, you'll be called by a fraudster who may use persuasive sales pitches, scare tactics, and false claims to deceive you and take your money.
Broadcast and Print Advertisements. You may place a call in response to a television, newspaper, or magazine advertisement. The fact that you initiate the call doesn't mean the business is legitimate or that you should be less cautious about buying or investing on the phone.
Tip-Offs to Telephone Rip-Offs Fraudulent telemarketers often use phrases like these — “You’ve been specially selected to hear this offer.” “You’ll get a wonderful free bonus if you buy our product.” “You’ve won one of five valuable prizes.” “You’ve won big money in a foreign lottery.” “You must send money right away.” “This investment is low risk and provides a higher return than you can get anywhere “You have to make up your mind right away.” “We’ll just put the shipping and handling charges on your credit card.” |
Prize offers. You usually have to do something to get your "free" prize, like attend a sales presentation, buy something, pay a fee, or give out a credit card number. But the prizes are worthless or overpriced.
Travel packages. "Free" or "low cost" vacations can end up costing a bundle in hidden costs. You may pay a high price for some part of the package — like hotel or airfare. The total cost may run two to three times more than what you'd expect to pay, or what you were led to believe. Some "bargain" vacations never happen at all.
Investments. People lose millions of dollars each year to "get rich quick" schemes that promise high returns with little or no risk. These can include movie or cable television production deals, Internet gambling, rare coins, art, or other "investment opportunities." The schemes vary, but one thing is consistent: Unscrupulous promoters of investment fraud rely on the fact that investing can be complicated, and many people don't research the
investment process.
Charities. Con artists often push you for an immediate gift, but won't send written information so you can check them out. They also may try to confuse you by using names that sound like well-known charitable organizations or even law enforcement agencies.
Recovery scams. If you buy into any of the above scams, you're likely to be placed in a sucker list and be called again by someone promising to get your money back. Be careful not to lose more money to this common practice. Even law enforcement officials can't guarantee they'll recover your money.
Defensive Moves In addition to knowing about the Telemarketing Sales Rule, it’s a good idea to keep the following tips in mind whenever you hear a phone solicitation:
|
The FTC's Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines.
The Rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, "sweepstakes," and prize promotion or investment opportunities. It also applies to calls consumers make in response to materials received in the mail, or offers received through the Internet.
Keep this information near your telephone. It can help you determine if you're talking with a legitimate telemarketer or a scam artist.
Although most types of telemarketing calls are covered by the Rule, there are several exceptions. The Rule does not cover the following situations:
Fight telephone fraud. Report telephone scam artists to the Federal Trade Commission and your state Attorney General. The Telemarketing Sales Rule gives these local law enforcement officers the power to prosecute fraudulent telemarketers who operate across state lines.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.