Are You A Target Of...Telephone Scams?
If you're age 60 or older, you may be a special
target for people who sell bogus products and services by phone.
It's 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 artists.
That's 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 deceptive telemarketers.
How 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 artists.
Here are some reasons older people become victims of
- 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
- 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.
Common Telephone Scam
Con 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
- Vitamins and other health products:
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.
Tip-Offs to Phone Fraud
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,
If you hear
these--or similar--"lines" from a telephone salesperson, just say "no
thank you," and hang up the phone.
The Telemarketing Sales Rule
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.
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
- 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, verifiable
- 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.)
Exceptions to the Rule
While 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
- 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
- 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
- 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.
What You Can Do To Protect Yourself
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
- Always check out unfamiliar companies with your
local consumer protection agency, Better Business Bureau, state Attorney
General, the National Fraud Information Center, or other
Unfortunately, not all bad businesses can be identified through these
- Always take your time making a decision.
- Legitimate companies won't pressure you to make a
- 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 advisor.
- Never respond to an offer you don't understand
- 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.
For More Help
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
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.
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