You A Target Of...Telephone Scams?
you're age 60 or older, you may be a special target for people who sell
bogus products and services by phone.
easy enough to fall prey to their sales pitch. Telemarketing fraud is a
multi-billion dollar business in the United States. Every year, thousands of
consumers lose from a few dollars to their life savings to telephone con
why the Federal Trade Commission (FTC) encourages you to be skeptical when
you hear a phone solicitation and to be aware of the Telemarketing Sales
Rule, a new law that can help you protect yourself from abusive and
Older People Become Victims of Telemarketing Fraud
Fraudulent telemarketers try to take advantage of
older people on the theory that they may be more trusting and polite toward
strangers. Older women living alone are special targets of these scam
are some reasons older people become victims of telemarketing fraud:
- Often it's hard to know whether a
sales call is legitimate. Telephone con artists are skilled at sounding
believable--even when they're really telling lies.
- Sometimes telephone con artists
reach you when you're feeling lonely. They may call day after day--until
you think a friend, not a stranger, is trying to sell you something.
- Some telephone salespeople have an
answer for everything. You may find it hard to get them off the phone --
even if they are selling something you're not interested in. You don't
want to be rude.
- You may be promised free gifts,
prizes, or vacations--or the "investment of a lifetime"-- but
only if you act "right away." It may sound like a really good
deal. In fact, telephone con artists are only after your money. Don't
give it to them.
artists never run out of scams. Have you heard any of these?
- Prize offers: You
usually have to do something to get your "free" prize--attend
a sales presentation, buy something, or give out a credit card number.
The prizes generally are 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.
- Vitamins and other health
The sales pitch also may include a prize offer. This is to entice you to
pay hundreds of dollars for products that are worth very little.
- Investments: People lose millions of dollars to "get
rich quick" schemes that promise high returns with little or no
risk. These can include gemstones, rare coins, oil and gas leases,
precious metals, art, and other "investment opportunities." As
a rule, these are worthless.
- Charities: Con artists often label
phony charities with names that sound like better-known, reputable
organizations. They won't send you written information or wait for you
to check them out with
- 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. Be careful not to lose more
money in this common practice. Even law enforcement officials can't
guarantee they'll recover your money.
to Phone Fraud
con artists spend a lot of time polishing their "lines" to get you
to buy. You may hear this:
- You must act "now"--or
the offer won't be good.
- You've won a "free"
gift, vacation, or prize--but you pay for "postage and
handling" or other charges.
- You must send money, give a credit
card or bank account number, or have a check picked up by
courier--before you've had a chance to consider the offer carefully.
- You don't need to check out the
company with anyone--including your family, lawyer, accountant, local
Better Business Bureau, or consumer protection agency.
- You don't need any written
information about their company or their references.
- You can't afford to miss this
"high-profit, no-risk" offer.
If you hear these--or
similar--"lines" from a telephone salesperson, just say "no
thank you," and hang up the phone.
Telemarketing Sales Rule
FTC's Telemarketing Sales Rule requires telemarketers to make certain
disclosures and prohibits certain 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 and investment opportunities.
It also applies to calls consumers make in response to postcards or other
materials received in the mail.
Keep this information near your
telephone. It can help you determine if you're talking with a scam artist or
a legitimate telemarketer.
- It's illegal for a telemarketer to
call you if you've asked not to be called. If they call back, hang up
and report them to your state Attorney General.
- Calling times are restricted to
the hours between 8 a.m. and 9 p.m.
- Telemarketers must tell you its a
sales call and who's doing the selling before they make their pitch. If
it's a prize promotion, they must tell you that no purchase or payment
is necessary to enter or win. If you're asked to pay for a prize, hang
up. Free is free.
- It's illegal for telemarketers to
misrepresent any information, including facts about their goods or
services, earnings potential, profitability, risk or liquidity of an
investment, or the nature of a prize in a prize-promotion scheme.
- Telemarketers must tell you the
total cost of the products or services they're offering and any
restrictions on getting or using them, or that a sale is final or
non-refundable, before you pay. In a prize promotion, they must tell you
the odds of winning, that no purchase or payment is necessary to win,
and any restrictions or conditions of receiving the prize.
- It's illegal for a telemarketer to
withdraw money from your checking account without your expressed,
- Telemarketers cannot lie to get
you to pay, no matter what method of payment you use.
- You do not have to pay for credit
repair, recovery room, or advance-fee loan/credit services until these
services have been delivered. (Credit repair companies claim that, for a
fee, they can change or erase accurate negative information from your
credit report. Only time can erase such information. Recovery room
operators contact people who have lost money to a previous telemarketing
scam and promise that, for a fee or donation to a specified charity,
they will recover your lost money, or the product or prize never
received from a telemarketer. Advance-fee loans are offered by companies
who claim they can guarantee you a loan for a fee, paid in advance. The
fee may range from $100 to several hundred dollars.)
to the Rule
most types of telemarketing calls are covered by the Rule, there are
exceptions. The Rule does not cover:
- Calls placed by consumers in
response to general media advertising, except calls responding to ads
for investment opportunities, credit repair services, recovery room
services, or advance-fee loans.
- Calls placed by consumers in
response to direct mail advertising that discloses all the material
information required by the Rule, except calls responding to ads for
investment opportunities, prize promotions, credit repair services,
recovery room services, or advance-fee loans.
- Catalog sales.
- Calls initiated by the consumer
that are not made in response to any solicitation.
- Sales that are not completed, and
payment or authorization for payment is not required, until there is a
face-to-face sales presentation.
- Calls from one business to another
unless nondurable office or cleaning supplies are being offered.
- Sales of pay-per-call services and
sales of franchises. These are covered by other FTC rules.
You Can Do To Protect Yourself
very difficult to get your money back if you've been cheated over the phone.
Before you buy anything by telephone, remember:
- Don't buy from an unfamiliar
company. Legitimate businesses understand that you want more information
about their company and are happy to comply.
- Always ask for and wait until you
receive written material about any offer or charity. If you get
brochures about costly investments, ask someone whose financial advice
you trust to review them.
- Always check out unfamiliar
companies with your local consumer protection agency, Better Business
Bureau, state Attorney General, the National Fraud Information Center,
groups. Unfortunately, not all bad businesses
can be identified through these organizations.
- Always take your time making a
- Legitimate companies won't
pressure you to make a snap decision.
- It's never rude to wait and think
about an offer. Be sure to talk over big investments offered by
telephone salespeople with a trusted friend, family member, or financial
- Never respond to an offer you
don't understand thoroughly.
- Never send money or give out your
credit card or bank account number to unfamiliar companies.
- Be aware that any personal or
financial information you provide may be sold to other companies.
Before you buy from an
unfamiliar organization, check it out with some of these groups. Your local
phone directory has phone numbers and addresses.
Call for Action
5272 River Road, Suite 300
State Attorney General
Better Business Bureau
Local consumer protection organization
National Charities Information Bureau
19 Union Square West
New York, NY 10003-3395
To stop unwanted telephone sales calls from many national marketers, send
your name, address, and telephone number to:
Direct Marketing Association
Telephone Preference Service
P.O. Box 9014
Farmingdale, NY 11735-9014
Under the Telephone Consumer Protection Act of 1991, you can ask that
companies put you on their "do not call" lists. If the company
calls you again, you can bring action in Small Claims Court.
For More Information
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
or to get
free information on consumer
issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.