Recognize and Avoid Telemarketing Fraud Few inventions have had greater impact on society than the telephone. This system of instant communication has made life easier for consumers and businesses. Unfortunately, the telephone has also made life easier for con artists. It is estimated that every year, telemarketing fraud robs Americans of more than $40 billion dollars. The Florida Department of Agriculture and Consumer Services is the state’s leading consumer protection agency. The department actively investigates telemarketing fraud and works to protect consumers by public education and consumer outreach. As with most scams, the best protection against telemarketing fraud is public awareness. The more people know about telemarketing fraud, the less likely they will fall victim to this faceless crime. Here One Day, Gone the Next | Unfortunately, fraudulent telemarketers are hard to track down. Most are “fly-by-night” operators working out of “boiler rooms” — leased space with rooms full of telephones staffed by trained scam artists. Once under investigation, they can easily shut down and move—virtually overnight—to another town or state. They usually change their name to cover their tracks.
Con artists are industrious and continually develop new ways to separate consumers from their money—in the form of cash, credit card, check or electronic debit from a bank account. Early forms of telemarketing fraud involved con artists obtaining a consumer credit card account number over the telephone and making unauthorized charges against it. In a newer twist on this scam, con artists obtain the consumer’s checking account number and electronically debit the account with unauthorized or inflated charges using a demand draft (a check that is generated by the merchant). A fraudulent demand draft is made by generating a check and imprinting it with the consumer’s name, address, phone number and, most importantly, the account number and the numbers necessary to route the draft through the banks’ check clearing system. The fraudulent check is then deposited the same as any conventional check and in most cases it clears in exactly the same way as a conventional check; the lack of a handwritten signature is not a problem in processing it. It is very important not to give out your bank account, credit card or personal information (date of birth, mother’s maiden name, social security number, etc.) over the telephone, unless it is to a known trusted source. Before doing business with any telemarketer, find out if any complaints have been filed against the company by calling the Florida Department of Agriculture and Consumer Services at 1-800-HELP-FLA (435-7352). You may also obtain additional information on how to file a complaint or to subscribe to the Florida Do Not Call list.
It’s tempting to believe that fraud only happens to someone else—someone less educated, less sophisticated, less financially astute. But, victims belong to all social and economic classes and age groups. In fact, 92% of adult Americans are affected. Swindlers also infiltrate social clubs, ethnic organizations and places of worship, to target victims more effectively.
The heart of the telemarketing operation is a room filled with desks, telephones and sales people who call hundreds of prospective customers all over the country. Most are assertive and highly skilled in conversational patter. Sales people use persuasive sales pitches, weaving together facts and half-truths. They deceive the prospective customer into believing that financial gains will be great, with very little risk. Con artists may be reluctant to send literature by mail; however, keep in mind that items that are sent may not necessarily be legitimate. They pressure the prospective customer to act quickly— usually immediately and over the phone. Allowing the customer time to think gives the potential victim a chance to become suspicious, check out the scheme or back out of the deal. As a result, telephone fraud usually involves urgency and includes phrases such as: -
“This opportunity is being offered to only a few investors.” -
“Prices will rise in the next few days, so act now.” -
“Large profits are guaranteed.” -
“Low risk or risk free. You can't lose.” -
“Insured against loss.” -
“Government guaranteed.” -
“Refundable, money-back guarantee.”
Remember, think before you act. Don't allow yourself to be pressured into something you are unsure of.
| 10 Tip-offs the Caller Might be a Crook |
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The phone number does not display on your caller ID. -
High pressure sales tactics, especially when the caller insists on an immediate decision. -
The offer sounds too good to be true. -
A request for your credit card number for any purpose. -
They offer to send someone to your home or office to pick up the money, or suggest methods of overnight mail to get your funds quickly. -
A statement that something is “free” followed by a requirement that you pay for something. -
An investment that is without risk. -
Unwillingness to provide written information or references. Legitimate telemarketers answer questions, provide written material to back up their claims and give the consumer ample time to decide. -
A suggestion that you should buy or invest on the basis of trust. -
You have been selected because of (“insert flattering reason here”) e.g., your outstanding credit, you have been a generous supporter in the past, etc.
| 10 Ways to Avoid Becoming a Victim |
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Allow yourself time to decide. -
Require written information by mail about the product, service, investment or charity. Additionally, ask for written information about the organization. -
Make certain you fully understand the investment before purchasing. Do the math. For example, if you are offered your choice of 6 magazines for only 15 cents an issue per day, that multiplies out to $1,620 for a 5-year subscription and may far exceed even the newsstand cover price! -
Investigate which state and federal agencies regulate this firm and which agencies require the telemarketer to be registered. -
Check the background of a company or organization before any purchase is made. -
If investing or making a major purchase, request information also be sent to your accountant, financial advisor, banker or attorney for evaluation. -
Ask what recourse you have if you buy and are not satisfied. -
Beware of testimonials that you have no way of verifying. -
Don't provide any personal or financial information over the phone, unless it is to a trusted source. -
If necessary, HANG UP!
| Protection from Unwanted Sales Calls |
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The Florida Department of Agriculture and Consumer Services maintains the state’s “Do Not Call” list. Florida residents who do not wish to receive sales calls may have their residential, mobile/paging device, telephone number(s) included on this list for a small yearly fee. The cost of having your telephone number on the list is $10 per number for the first year. A yearly renewal fee of $5 per number is required to keep your number on the list. Annual notices are mailed to remind you to renew your subscription. The Florida Do Not Call law offers protection for consumers who do not wish to receive telephone sales solicitation calls at home. Furthermore, the law requires solicitors to identify themselves by true first and last name and by the name of the business on whose behalf they are calling. Most telephone solicitation firms are prohibited from calling any phone number on the list. The list is updated quarterly and published on the first business day of January, April, July and October. Pre-recorded sales messages (a sales call made with a pre-recorded message and without a real or “live” person to introduce that message) are prohibited. Pre-recorded messages frequently instruct you to remain on the line for a live operator if you are interested. If you receive a pre-recorded sales message, it is a prohibited solicitation message. Please contact the Florida Department of Agriculture and Consumer Services at 1-800-HELP-FLA (435-7352), or you can file a complaint online at www.800helpfla.com. Some telephone sales calls are exempt from the provisions of the Do Not Call Law. Solicitors may make calls: -
In response to an express request by the person called; -
In reference to an existing debt, contract, payment or performance; -
To any person with whom the telephone solicitor has a prior existing business relationship. These companies include: debt-collection efforts and phone contracts; -
About the newspaper business, including newspaper publishers, agents or employees; or -
For solicitation of charitable contributions. -
Calls placed by a licensed real estate salesman or broker in response to a “For Sale” sign or similar advertisement placed by a consumer in their yard.
| If You're on the List but Receive a Call | If you are currently on the Florida Do Not Call list and receive a sales solicitation call that does not meet the exemptions outlined above, or a pre-recorded message, immediately report it to the Florida Department of Agriculture and Consumer Services by calling 1-800 HELP-FLA (435-7352) from within Florida, 850-488-2221 from outside of Florida or 1-800-FL-AYUDA (352-9832) en Español. You can also file a complaint online. The Florida Department of Agriculture and Consumer Services has the authority to contact the solicitation firm, inform them of the requirements of the law and require them to comply. The department will warn the offender once through informal mediation. If the offender does not comply, the law provides for civil penalties of up to $10,000 per violation and injunctive relief through the courts. |
