Preventing Telemarketing Fraud

Learn How to Protect Yourself!

An illustrated fact sheet that describes how con artists cheat people over the phone, and gives tips to avoid being a victim of fraud. Includes a list of the "10 Warning Signs of Fraud."

Preventing Telemarketing Fraud

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Table of Contents

Note: Last revision 1994. Use this information as a general guide only; consult with a local consumer group for laws specific to your state.

It may have happened to you

  • You get a phone call offering a "free" vacation--for which you have to send a processing fee.
  • Or a postcard telling you that you've won a new car, but you need to call with your credit card number to pay for shipping charges.
  • Or it could be a newspaper ad, promising valuable job leads if you call a 900 number.

It sounds like a dream come true. But all too often, these dream deals turn out to be nightmares.

Many people fall for the fast talk, send their money or give their credit card or bank account numbers, wait for employment information or plane tickets that never show up, and find themselves poorer--sometimes by hundreds, even thousands of dollars. Even people who are usually very careful about their finances can get hooked.

Telemarketing fraud is a very big business. A congressional subcommittee has estimated that these kinds of crooked operations may rob people of as much as $40 billion a year.

Why is telemarketing fraud so successful?

The people who call you offering these "great deals" are very, very good at lying. On the phone, they use the smoothest sales techniques to hook you. They'll start making friendly conversation, telling you things you want to hear. They'll make their company sound reliable, and make their offer sound irresistibly attractive and inexpensive. And they know how to pressure you at just the right time.

Some send postcards, coupons and "certificates" that look so official even skeptical people are convinced. They know exactly how to persuade you to believe in them and the deal they're offering.

So you wait for your prize or check or merchandise to arrive, but it usually doesn't. When you call back, the friendly voice on the phone tells you it's on the way. Sometimes it does arrive, but it's shoddy, clearly worth much less than you paid. When you call again to complain, you get a run-around, or find that the company has disappeared without a trace.

The problem is so widespread that more than 92 percent of Americans have received at least one postcard solicitation. These crooks have many ways to find you. Sometimes they buy phone numbers from other telemarketers. Or they buy magazine subscription lists to get the names of thousands of potential victims. But there are ways you can protect yourself. They are not foolproof, but they can help keep crooks from cheating you.

How can you protect yourself?

  • Listen Carefully when you get a phone solicitation. With mail solicitations, be sure to read between the lines. The more you can find out beforehand, the less likely you'll be to fall victim to a fraud. But be aware that some telemarketers will continue to lie to you, no matter how many questions you ask them.
  • If You're Suspicious, Tell the Caller Not to Call Back, and hang up. The longer you stay on the line with dishonest telemarketers, the better their chances are of finding a way to convince you that they are sincere. If they think they can catch you, they'll continue to talk--or will call back again and again, putting more pressure on you each time. If you tell the company not to call you again, it is illegal for it to do so (but crooked telemarketers frequently ignore the law).
  • Don't Let Them Pressure You. If the offer sounds interesting, get all the facts, hang up and talk it over with friends. Fraudulent telemarketers try to make sales as quickly as possible. They'll use every possible technique to get you to agree immediately. They often say that the offer is only good for that day, that the price is going up soon or that there's only a limited supply. Don't fall for it. If the deal is legitimate, there's no need to rush.
  • Ask Them to Send You More Information. This will give you more time to review the offer. When the information arrives, read it carefully. If you never receive anything, you can be pretty sure that the telemarketer was trying to cheat you.
  • Protect Your Phone Number. Don't print it on your checks, or give it to merchants or anyone else you don't know well.
  • Guard Your Credit Card Number and Expiration Date. A dishonest telemarketer can use your number not just to charge you for whatever is being offered, but to make unauthorized charges on your card and to make counterfeit cards.
  • Don't Give Anyone Your Social Security Number. A Social Security number can enable a crook to open credit accounts or otherwise establish credit in your name. They can then use the accounts to run up huge bills.
  • Protect Your Checking Account. Treat it like your credit cards--don't give your account number to anyone you don't know and trust.
  • Be Cautious about Giving to Charities. Many legitimate charities raise money by phoning potential donors, but con artists also like to take advantage of people's generosity. They'll use a name that sounds like a well-known charitable organization and trick you into making a donation that ends up in their pockets.

10 warning signs of fraud

Be alert for these statements when a telemarketer calls you. They are important warnings telling you to be suspicious:

  1. You've "won a prize," or "a prize has been reserved for you."
  2. You've been "selected to receive" a special offer.
  3. You must "act immediately" or lose your chance for a special offer.
  4. You must spend money to "reserve your free gift" or "pay for shipping for your gift."
  5. You're promised "fantastic financial returns" or "risk-free investing."
  6. You're told that a "legal loophole allows people in the know" to profit from a "one-time-only situation."
  7. You're asked for your credit card number and expiration date "to make sure you are a credit card holder."
  8. You're asked for your Social Security number or personal financial information, such as your bank account number.
  9. You're asked to donate to an agency that sounds like a well-known charity, such as the "American Cancer Center" (instead of the American Cancer Society).
  10. You're asked to give to an organization you don't know, but that sounds like it's linked to a public agency, like the "Police Support Center."

Remember--if it sounds too good to be true, it probably is.

Where can you call if you think you've been cheated?

  • The National Fraud Information Center: 1-800-876-7060
  • The Federal Trade Commission: 1-202-326-2000
  • The Postal Service, for mail fraud: Check your local phone book for the postal inspector.
  • The attorney general's office for your state, or the district attorney or consumer affairs agency in your region: Check your local phone book.

Published / Reviewed Date

Published: April 01, 1994

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Funded by Visa USA, Inc. Electronic publication funded by Sprint

Filed Under

Fraud/Scams   ♦   Telecom   ♦  


© 1994 –2024 Consumer Action. Rights Reserved.




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