Telephone and telemarketing fraud is a type of fraud whereby a con artist speaks to a potential victim by using the telephone. Telemarketing, however, is also a legitimate way to conduct business. Because of this, it is all too easy for a criminal to pose as a trusted business and obtain information about someone’s identity and financial details. This is then used to make purchases elsewhere. It is very difficult to tell the difference between a scam artist and a legitimate telemarketing business, and it is certainly untrue that only the most gullible can fall victim to this. However, the elderly, the poor and immigrants with English as a second language are at particular risk of being targeted.
How to Spot a Scam Telemarketing Call
So how do you know whether a telemarketing call is real or not? Con artists are notoriously good at coming across as friendly, trustworthy and knowledgeable. This is why it is so important that you are aware of your telemarketing rights. A scammer is unlikely to follow these rules. They may, for instance, call you even though you are listed on the National Do Not Call Registry.
Another red flag is that you haven’t given a company permission to call you, or if you receive a so-called ‘robocall’, which means that you are being phoned by a machine. You may also notice that the telephone number of the telemarketer is blocked even though you have caller ID. A reputable business would always share their phone number with you. Make sure that you also check the Understanding Your Telemarketing Rights and Avoiding Fraud publication created by the Consumer Federation of America. This is filled with useful information to protect yourself.
Some of the Common Danger Signs
There are a number of particular danger signs to be wary of. These include:
• Putting you under pressure to make a decision straight away, stating that you will otherwise miss out on an opportunity.
• Promising you that you can make money by working from home with almost no effort.
• Offering to help you out of any kind of financial difficulty by paying a small fee.
• Guaranteeing that an investment opportunity is low risk and will yield high returns.
• Asking you to pay money in order to take part in a competition or sweepstakes.
• Offering you a prize as part of a sales pitch.
Another important clue is when a telemarketer asks you how you would like to pay for the service they are offering. They will try to make the payment as untraceable as possible. Hence, it is unlikely that they will accept checks. They may accept credit card payments, although this is rare. Their preferred methods will be for you to send cash directly, for instance, through a money transfer. Money transfers are very dangerous things and you should only use them if you absolutely know who you are sending the money to. Additionally, if you were to pay for a genuine service or product, you should always have a choice in terms of how you want to pay for it. As technology develops, so do payment methods and so do the tricks used by fraudsters. Hence, they may now also ask you to put money on prepaid cards or use a MoneyPak. Luckily, merchants, such as PayPal, are very clued up on fraudsters and have protection methods in place.
At the same time, scammers are taking advantage of internet phone services, prepaid cell phones and technologies, such as caller ID spoofing. This helps them to hide their physical location. Often, they are not based in this country, which makes it very difficult for our federal agencies, such as the Federal Bureau of Investigation, to prosecute them. Below are a number of common types of telemarketing schemes.
Advance Fee Scams
One of the more common types of telemarketing scams is the advance fee scam. Here, a victim will be encouraged to pay out sums of money (often starting small but becoming bigger over time) in order to receive a large rate of return at a later stage. The Nigerian 419 Letter is perhaps the most famous of this type. In this scam, someone pretends to be a prominent figure of government or the military who has knowledge of the presence of a large sum of money and is looking for a benefactor in this country in order to have this money transferred. As a reward, those who cooperate will receive a percentage of the huge sum of money. Not only have people lost their life savings in this scam, some people have even lost their lives by being lured to Nigeria.
Pyramid schemes are also very popular. These are tirelessly prosecuted by the U.S. Department of Justice. In these schemes, people are asked to pay money up front and are told that they will get it back by signing up more people to the same scheme. These people will then sign up others, through which they also receive a percentage, and so on. While the fact that the initial investment can grow is true, it is actually only true for those who join up at the start of the project itself. Most followers find themselves at the bottom and actually see no return whatsoever.
Over-Payment Telemarketing Schemes
With an over-payment telemarketing scheme, a fraudster uses the names of trusted businesses and organizations and send a fake check from a particular organization to the victim. The victims are then told that they were over-payed for an online sale, for instance, on an auction website like eBay. The victim is then contacted by telephone and is asked to wire the money back, which is then taken by the criminal. The fake check, naturally, cannot be encashed and the wired money cannot be recovered.
Whenever there is some sort of national or international disaster, the number of telemarketing scams goes up. In many cases, fraudsters pose as charities collecting money supposedly to help the people affected by that particular disaster. They will ask for credit card payments or money transfers and will impart a sense of urgency, as the people affected by the disaster need help as soon as possible. The information provided by those who fall for it, such as their bank account details and credit card information, is then used to make unauthorized purchases.
Protection from Telemarketing Fraud
Telemarketing fraud is prosecuted under 18 U.S.C. paragraphs 2325-2327 Telemarketing Fraud. Various agencies, such as the FBI, the Financial Crimes Enforcement Network and the National White Collar Crime Center are involved in protecting victims and prosecuting offenders. One of the most important things to do is to register your number with the National Do Not Call Registry and that you use common sense by being aware of the red flags as listed above. Do also check your rights and look into other tips to avoid specific types of fraud as provided by the Consumer Federation of America.