What To Do If You’ve Become
The Victim Of Telemarketing Fraud
Americans lose an estimated $40 billion each year
due to the fraudulent sales of goods and services over the telephone. The
elderly are frequently targeted. Studies have shown that fraudulent telemarketers
direct anywhere from 56% to nearly 80% of their calls at older consumers.
It is often difficult to recover money lost to a telemarketing scam. Even
so, there are several practical actions that you can take to minimize losses
and avoid future scams.
Common telemarketing scams
Sweepstakes and Prize offers: Schemes in which
consumers are lured by false offers of cash or other prizes.
Travel packages: Vacation packages that are
advertised as "free" or "low cost". These packages end
up costing an exorbitant amount because of hidden costs, or the seller may
not ever provide the promised trip.
Investments Schemes and Work-At-Home Scams:
These schemes promise that you will "get rich quick" or "make
$1000/week from home." They advertise high income with little or no
risk, but end up delivering nothing.
Charity Fundraising Scams: Phony charities
that ask for money over the phone, often pressuring you for an immediate
gift. Phony charities may try to confuse you by using names that sound like
well-known charitable organizations or even law enforcement agencies.
900 Numbers or Pay-per-call Services (also
known as "pay-per-call" or "information access" services):
These scams entice you to pay to make calls in order to receive information,
such as how to save money on groceries or how to receive free credit cards.
They then charge you exorbitant prices for calling these numbers.
Recovery Scams: Telemarketers who prey on people
who have already been victimized by other telemarketers. For a hefty fee,
the recovery room scam will promise to get your money back, or get you the
prize or investment you didn’t receive from the first scammer.
Advance Fee Loan Scams: Fraudulent loan brokers
and other individuals misrepresent the availability of credit and credit
terms, often stating that they guarantee you will get a loan or other type
of credit - but you must pay before you apply.
Credit Card Protection Scams: Telemarketers
misrepresent that they are affiliated with a credit card company and offer
plans to limit your liability for lost or stolen credit cards. This is done
even though federal law limits such liability to no more than $50.00.
Tip-Offs to Telemarketing Fraud
Common statements or “lines” from fraudulent telemarketers include
the following:
You must act "now"--or the offer won't be
good.
You've won a "free" gift, vacation, or prize--but
you have to pay for "postage and handling" or other charges.
In order to pay for goods or services, you must send
money, give a credit card or bank account number, or have a check picked
up by courier.
You don't need to check out the company with anyone.
You don't need any written information about the company.
You can't afford to miss this "high-profit, no-risk"
offer.
Reporting Telemarketing Fraud
You should always report telemarketing fraud. One organization that can
help is the National Fraud Information Center. Call the Center at 1-800-876-7060
or go to www.fraud.org. The line is open
9:30 am to 5:30 pm (Eastern Time). Operators are available to give you guidance
as to whether a telemarketing call appears fraudulent. If so, the Center can
help you file complaints with government agencies such as the Federal Trade
Commission (FTC), FBI, local consumer protection program, and your state attorney
general. You can also file a complaint with these agencies directly.
Reporting the fraud may not get you the money back, but it will help prevent
the scam artist from hurting others. In some cases, a government agency may
take action against a company and even get some refunds. If you report the
fraud, you help make sure your name is on the list of victims to get refunds.
If a Credit Card Was Used
Federal law provides valuable rights if you used a credit card to pay a telemarketer
who defrauded you. The law allows you to dispute charges for goods that were
never delivered or not delivered as represented. There are TWO ways you can
do this:
Option 1
You can make a claim with your credit card company about the telemarketer’s
fraud if you meet the following 3 requirements:
The amount in dispute is more than $50;
The transaction occurred in the same state or within 100 miles of your current
address (You should argue that the telephone transaction occurred in your
home state since that is where the telemarketer initiated the sale); and
You have made a good faith effort to resolve the matter with the telemarketer.
You will need to write a letter to the credit card company explaining how
the telemarketer cheated you and your attempts to resolve the problem. You
should NOT pay the amount in dispute until your claim is resolved, because
payment waives your right to assert this remedy.
Option 2
If you cannot meet the requirements of Option 1or have already paid the disputed
charge, you can still claim that the charge is a billing error. (The federal
government has stated that the failure to provide purchased goods or services
is a billing error). The credit card company is required to start an investigation
and reverse the charge if warranted. Information on how to notify your credit
card company about a billing error should be included on a regular basis with
your monthly credit card statements.
Telephone Charge Fraud
If the fraud involves a 900 number or pay-per-call service, the charge will
appear with your local telephone bill. This is not a charge from your local
telephone company. UNDER FEDERAL LAW, YOU CANNOT BE DISCONNECTED BY YOUR LOCAL
TELEPHONE COMPANY OR LONG DISTANCE CARRIER FOR FAILING TO PAY THESE CHARGES.
The law also requires telephone companies to offer you the option of blocking
access from your phone to pay-per-call services. Your state law may also protect
you from abusive 900 number practices.
Sometimes charges will appear on your local or long distance telephone bill
for services that you never ordered. These may involve pay-per-call services
or other types of services, such as club memberships or voicemail services.
The practice of adding unauthorized, misleading, or deceptive charges to your
phone bill is called cramming and it’s illegal. Always check your telephone
bill carefully and call your local or long distance telephone company if you
see any charges that you don’t understand or remember ordering.
Prevent Future Fraud
Register your telephone number with federal and state “do-not-call”
registries (see below for information on how to do this).
Never let a telemarketer pressure you to make an immediate decision.
Never give your credit card, checking account or social security number
to an unknown caller.
Before you buy something over the phone, get all information in writing,
including any refund policies.
Never pay for something just because you’ll receive a "free gift."
Scam artists will try to get you to buy something by making you feel guilty
that you received a free gift. Don’t fall for this. "Free"
means free.
Check out a telemarketer’s record with your Better Business Bureau,
local consumer protection program, or state attorney general.
Avoid wiring money or sending cash, money orders or personal checks. If
you use these payment methods rather than a credit card, you may lose valuable
rights to dispute fraudulent charges.
To stop most telemarketing calls
If you want to stop receiving calls from most telemarketers,
whether or not you think the telemarketer is legitimate or fraudulent, you should
ask to be added to the Federal Trade Commission’s “Do-Not-Call”
registry and any similar registry that may exist in your state. You may register
online at WWW.DONOTCALL.GOV or by phone by calling 1-888-382-1222 (TTY 1-866-290-4236).
You must call from the telephone number you wish to register. Registration with
the FTC’s do-not-call registry is free. If you register online you must
provide an email address for confirmation. Once you have registered, your telephone
number will remain on the registry for five years, or until it is disconnected,
or until you delete it from the registry. After five years you can renew your
registration. Your state may also maintain a “do-not-call” list.
You can contact your state attorney general or state consumer protection program
to learn if your state has such a list and how it may protect you.
You may also contact the Direct Marketing Association (DMA), which represents
many businesses that engage in telemarketing and other forms of direct sales.
Ask the DMA to remove your name from lists that its members use. While many
fraudulent telemarketers will not respect such a request, this will stop any
telemarketing calls from DMA member telemarketers. Contact the DMA at:
DMA Telephone Preference Service P.O. Box 9014 Farmingdale NY 11735 (212) 768-7277
Additional Resources
National Consumer Law Center, Unfair and Deceptive Acts Manual (5th ed.
2001 and Supp.)), [includes FTC Rules applicable to Telemarketing and a list
of state telemarketing fraud statutes]. For more information, see www.nclc.org
or call NCLC Publications at (617) 542-9595.
American Association of Retired Persons, 601 E St., N.W. Washington, DC
20049 www.aarp.org
Federal Trade Commission, 600 Pennsylvania Ave., N.W. Washington, DC 20580
www.ftc.gov
National Association of Attorneys General, 750 First Street, N.E. Suite
1100 Washington, DC 20002 www.naag.org
Advocates for elders seeking more information can call the National Consumer
Law Center at (617) 542-8010 or visit our website at www.consumerlaw.org.
July 2003
This brochure was supported, in part, by a grant, number 90-AP-2640,
from the Administration on Aging, Department of Health and Human Services, Washington,
D.C. 20201. Grantees undertaking projects under government sponsorship are encouraged
to express freely their findings and conclusions. Points of views or opinions
do not, therefore, necessarily represent official Administration on Aging policy.
