Consumer scams through telemarketing are extremely common ways fraud is committed in the United States. According to the National Consumer League’s Internet Fraud Watch, there are some scams that are more prevalent than others. Let’s take a look at the most common Telemarketing Fraud Scams in the United States.
Scam #1: Fake Check Scams
In this scam, you receive interest from a classified ad for an item to be sold (e.g., car, furniture, etc.). This prospective “buyer” offers to give you more than the requested amount by a certified check, and then he/she asks that you wire the remainder to him/her. Unfortunately, the certified check is a fake and now you do not receive that money and you have lost the “remainder” that you sent.
Scam #2: Prizes/Sweepstakes
In this scam, you are promised payment for a prize or sweepstakes that never happens. In many instances, you may not even remember signing up for the sweepstakes or prize (probably because you didn’t). Your name is selected, and the scammers then ask for your personal information to either send the money (with a counterfeit check, which can get you into trouble), or they say they can deposit the money directly into your account. Either way, you will not obtain the funds.
Scam #3: Advanced Fee Loans
In this scam, you are given a call from a solicitor promising you a business or personal loan, no matter what your credit looks like, for an upfront fee. Turns out, you supply the fee and your personal financial information, and the scammers get your identity as well as any money you may have.
Scam #4: Foreign Lotteries
This scam occurs when agents from foreign countries contact U.S. persons by telephone to entice them to purchase chances in a high-stakes foreign lottery. Once the “victims” buy into the scheme, they are called to announce that they won the lottery and will need to send money to pay for administrative fees and taxes to obtain the prize money, as well as personal financial information to send the prize to them. No matter what is said, this is ALWAYS a scam. Furthermore, it is illegal for any foreign lottery to solicit customers in the United States.
Scam #5: Phishing
A phishing scam occurs when consumers are asked to provide personal financial information to someone who is not a legitimate source. In most instances, phishing happens when you receive an e-mail from what appears to be a business you deal with (e.g., financial institution) asking to update your personal information (i.e., credit card information, bank account numbers, etc.) due to an upgrade in the security system or other issue. In most instances, the e-mail has a link to a fraudulent, “look-a-like” site where you would then put in your information and the scammers use it fraudulently.
In the case of telemarketers, you may get a call from someone pretending to be from a company or government agency, making the same kinds of false claims as he/she would make an e-mail, and asking for your personal information.
Scam #6: Magazine Sales
This scam occurs when someone calls and asks you to renew your current magazine subscription through his/her company, or he/she asks you to sign up for a new magazine. In most instances, the person on the other end of the phone is a con artist trying to trick you into spending more money than you need to for a magazine you will never receive.
Scam #7: Credit Card Issuing/Loss Programs
In this scam, a person calls to provide you with a new credit card at a great rate with a high credit limit. Additionally, the person will ask you to provide him/her with your personal financial information so he/she can transfer your current card amount onto the new card at no extra charge. Unfortunately, you will probably NOT ever receive the new card and now you have given all of your personal information to a scam artist.
Scam #8: Scholarships/Educational Grants
In this scam, you will receive a phone call stating that you can receive a scholarship without having to put forth any effort. Additionally, you may also be told you can obtain an educational grant for free and you will never have to pay back the money.
Scam #9: Buyers Club
Buyers' Clubs offer great deals and discounts to their members. In this scam, you will discover that you have been charged a membership fee for a club you may not remember joining, or that the deals are not as great as promised.
Scam #10: Nigerian Letter Scams
In this scam, you are promised by a “government official” or other high ranking official (or his/her family member) of a foreign country to receive a large amount of money for providing your financial information to transfer money out of the country. The perpetrator will then use the information provided to empty out your bank account. Additionally, the perpetrator may persuade you that money is needed upfront to pay for fees or bribe officials.
How Can You Avoid Telemarketing Consumer Scams?
Many legitimate businesses use telemarketing as a critical source for increased business; however, fraudulent telemarketers use the phone to drum up business, too. It is important that you consider the following when you receive a telemarketing call for any type of product or service.
Know the rules. It is important that you understand what is legal and what is illegal when it comes to telemarketing pitches. For example, it is illegal for anyone to require an upfront fee for any type of credit card or loan approval offer. It is also illegal for a company to ask you to pay for or buy something to participate in a sweepstakes or that it will increase your chances for winning. It is also illegal to buy and sell tickets to foreign lotteries over the telephone.
Don’t feel the pressure. Most telemarketers are trained to close the sale during the first contact with a customer. Don’t ever feel pressured to buy something or sign up for a service if you do not feel comfortable doing so.
Stay aware from demands. Any time you are told you must pay for something in full over the telephone, you may want to steer clear from the offer until you carefully check it out. If the solicitor demands that you pay by wire or courier, you should not do so. If the solicitor states that you must make payment for taxes or customs fees to claim a prize, do not do so.
Be realistic. If the person calling states that you can receive a grant without ever having to pay it back, or by paying an upfront fee you can receive a loan that you know you shouldn’t receive, you should not take the offer. The reality is if it sounds too good to be true, it is probably a scam. Use your best judgment and common sense with any sales pitch you receive over the telephone.
Know who is calling you. If a business or charity seems to be unfamiliar to you, don’t act with them until you have checked them out further. Call the Better Business Bureau or other consumer protection agencies to gather information on the business or charity. It is important to recognize that con artists will open and close a business quickly, so you need to check into more than just how many complaints have been filed by customers. You may also want to ask for advice about the type of pitch you were given and other danger signs of fraud.
Use a credit card. Whenever you purchase something over the telephone, you should use a credit card because any transaction made can be disputed. For example, if you purchase something that does not come as promised, you can refuse delivery and dispute the charge. You do not have the same dispute rights when you pay with debit cards, checks or cash.
Use caller ID. It is a good idea to use caller ID on your phone so you will know if the caller is a business you may not recognize. If you do not have caller ID, you may want to use your answering machine to screen calls.
Know your “do-not-call” rights. You should put your number on the “Do-Not-Call” Registry to stop most unsolicited telemarketing calls. Simply call (888) 382-1222, TTY 866-290-4326, or go online to www.donotcall.gov. You can also tell companies to not call you again on a case-by-case basis. You should report any violations to the “Do-Not-Call” Registry.
Source: National Consumers League, 2007 Watch List
If you have been a victim of telemarketing fraud, you should contact the police as soon as possible. The faster you let someone know of the problem, the better the outcome will be.