The Telemarketing Fraud Prevention Act, sponsored by Senator Kyl, was signed into law in 1998. The act strengthens penalties for telemarketing fraud by imposing an additional mandatory sentence of up to five years, and by requiring offenders to forfeit any real or personal property derived from crime. The act also facilitates the prosecution of the masterminds behind criminal enterprises by allowing enhanced penalties against those convicted of conspiring to commit telemarketing fraud.

The heart of a fraudulent telemarketing operation is usually a "boiler room," a rented space with desks, telephones, and well-trained operators who call hundreds of people across the country every day.

Fraudulent telemarketers may reach you in several ways:

Cold Calls: Operators may get your number from a telephone directory, a mailing list, or a list containing names, addresses, phone numbers, and certain other information, such as how much money people spent when they responded to previous telemarketing solicitations. The lists are bought and sold by promoters. They are invaluable to scam artists, who know that consumers who have been deceived once are especially vulnerable to additional scams.

Direct Mail: You may get a letter or postcard saying you've won a prize or a contest. This may be a front for a scam. Instructions tell you to respond to the promoter with certain information. If you do, you'll be called by someone who may use persuasive sales pitches, scare tactics, or 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.

Telemarketers use several "hooks" to entice potential victims:

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. The prizes are often worthless or overpriced.

Travel packages: "Free" or "low cost" vacations can end up costing a bundle in hidden costs, or they may never happen. 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.

Investments: People lose millions of dollars each year on "get rich quick" schemes that promise high returns with little or no risk. These can include movies, cable television, Internet gambling, rare coins, art, and other "investment opportunities." These schemes vary, but one thing is consistent: Unscrupulous promoters 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 called again by someone promising to get your money back for you. Be careful not to lose more money to this common practice. Even law-enforcement officials do not guarantee they'll recover your money.

Some phrases con artists use:

"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 else."
"You have to make up your mind right away."
"We'll just put the shipping and handling charges on your credit card."

To report telemarketing fraud, you can contact the Federal Trade Commission's Consumer Response Center by phone, toll-free at 1-877-FTC-HELP (382-4357), TDD: 202-326-2502.

By mail: Consumer Response Center
Federal Trade Commission
Washington, DC 20580

Or use the online complaint form at www.ftc.gov.

There are several ways to protect yourself against telemarketing fraud:

• Don't be pressured into making an immediate decision.
  
• Don't give your credit card, checking account, or Social Security Number to unknown callers.
  
• Don't pay for something merely because you'll get a "free gift."
  
• Get all information in writing before you agree to buy.
  
• Check out a charity before you give.
  
• Ask how much of your donation actually goes to the charity.
  
• Ask that written information be sent to you so you can make an informed giving decision.
  
• Don't invest your money with an unknown caller who insists you make up your mind immediately.
  
• Be cautious of statements that you've won a prize -- particularly if the caller says you must send money to claim it.

Indian Arts and Crafts Act

Identity Theft Act

Cellular Telephone Protection Act