PUBLIC HEALTH DEPARTMENT

A Consumer Ac tion publication Protect yourself against telemarketing fraud Dont for the wrong call fall Dont fall for the wrong call Telemarketing fraudusing the phone to swindle and cheatrobs U.S. consumers of about
$40 billion a year. According to the Direct Marketing Association, overall telemarketing sales, both business-to-consumer and business-
to-business, reached $585 billion in 2000.There are many legitimate, law-abiding companies offering their products
and services over the phone. But the problem is
that not all telemarketers work for legitimate
companiessome are crooks to whom the law
means nothing. To protect yourself from telemarketing fraud, its a
good rule not to do business over the phone with
any company you dont know. Crooks are skilled in
manipulating you.They sound professional and
convincing.You do not have to listen to any sales
pitch over the phoneyou can always say you are
not interested and hang up. In 2001, AARP estimated that U.S. residents
received approximately 19 billion unsolicited sales
calls per month.To combat potential fraud, federal and state governments have passed laws and regulations that
protect consumers. Nationally, some 5 million households are on do-not-call lists.There are also services and
products you can buy to prevent telemarketers from calling you. But the best way to fight phone fraud is to
understand how it works and know your consumer rights. Tricks and traps If a telemarketing offer sounds too good to be true, it probably is. Dont fall for these common tricks: Prizes. If a caller says youve won something, it might signal fraud.Winners often are asked to send an inflated shipping and handling fee for their free prize, which turns out to be worthless. In other cases, crooks mail millions
of postcards promising people that theyve won prizes. So-called winners are asked to call a 900 number (which
costs money) and are subjected to a lengthy sales pitch. Free trial offers. So-called no obligation offers to try a new product or service end up costing consumers as much as $100 million per year because they fail to tell you that
youll be billed for the full price of the service if you dont
cancel by a certain deadline. Even if you never gave the
company your credit card number, you might be charged for
a free offer because telemarketers often obtain your credit
card information illegally. Travel deals. Some telemarketers offer travel deals that sound great. Not every deal is fraudulent, but even legitimate travel offers can have significant conditions or catches. Many such offers require you to sit through a
lengthy sales pitch for time share resorts, a type of vacation real estate ownership that has been the subject of
many complaints. DID YOU KNOW? Telemarketing industry
executives point out that unsolicited sales calls
arent always unwelcome.You might hear from a
company you want to do business with, such as
your local newspaper.The Newspaper Association
of America reports that phone solicitations
account for 58% of new subscribers generated by
marketing campaigns.You might save money by
taking advantage of discounts offered through a
telemarketing campaign. Just be sure youre
dealing with a company you recognize. DID YOU KNOW? Scam artists compile
and sell sucker lists of people who are
easy to trick because theyve fallen for
telemarketing pitches in the past. Credit cards. The telemarketer offers a guaranteed credit card if you pay a hefty fee in advance. It is illegal for telemarketers to require up front payment for credit. Credit protection. Swindlers may call saying they are from MasterCard or Visa, hoping to fool you into paying for phony credit protection.The callers warn that if you dont purchase their protection services you will be held liable
for any unauthorized charges made on your credit card. But existing federal law limits your loss to $50 if your card is
used without your permission. Investment fraud. You are promised a guaranteed risk-free investment.There is no such thing.The scam artists who pitch the investments are good at sounding as if they represent legitimate businesses.They may have lots of
information about yousuch as your age, income and net worth.This information is available from marketing lists
that anyone can buy. Many people have lost their life savings after only a phone conversation, and despite their best
efforts, law enforcement and regulatory agencies
usually cant get the victims money back. Responding to ads. Its common for swindlers to send direct mailings or advertise in reputable
publications or on the Internet to entice you to call
them.The ads offer easy loans, credit cards,
investments or work-at-home opportunities. Even if
you are the one to place the call, be very cautious
about giving out bank account and credit card
numbers to unfamiliar businesses. Give wisely When a crisis hits the news, crooks are usually close
behind. Following the Sept. 11, 2001 terrorist attacks,
many people received callsand e-mails
attempting to take advantage of the tragedy. Often
these scam artists are trying to get your bank or credit
card account numbers Be careful before promising a telemarketer money for
a charity. Many legitimate charities raise money by
phoning potential donors, but crooks take advantage
of peoples generosity. Dont be fooled by the name of a
charitymany scam artists use a name that sounds
like a well-known charitable organization to trick you
into making a donation that ends up in their pockets. Ask the caller to send you information about the
charity. Get all the information you can about the
charity and then verify it. Ask what percentage of the money you donate actually
goes to the charity (and not the fund-raising effort).
Before donating, check with one of the charity
watchdog organizations listed under Helpful
Resources at the end of this booklet. Warning signs of fraud Be suspicious of statements like these:
Youve won a prize or free gift.
Youve been selected to receive a special offer.
You must act immediately or lose out on a
great deal.
You must pay for shipping your prize or free
gift.
Youre promised fantastic financial returns or
risk-free investing.
Youre told that theres a secret legal loophole
that will allow you to profit.
Youre asked for your credit card number and
expiration date to verify that you are a credit
cardholder.
Youre asked for your Social Security number
or other personal information, such as your
bank account number.
Youre asked to donate to an agency whose
name sounds like a well-known charitysuch
as the American Cancer Center (instead of the
American Cancer Society).
Youre told that you are one of just a few
special people to receive this offer.
You are pressured to allow the caller to send a
courier to your home to get your payment.
Youre told that you have purchased the
callers product or service in the past but you
dont remember doing so. Whos there? When you pick up a ringing phone and hear silence on the other end, you may have been called by a computer
dialing system. Companies use automatic dialers to simultaneously dial many phone numbersmore than their
employees could handlepredicting that some of those calls will be answered by an answering machine, will ring
with no answer because no ones home or will be busy. Answered calls are routed to available sales agents.
Sometimes more people answer than predicted. At that point, some of the calls are disconnected. Automatic dialing is frustrating in itself but it also makes it difficult to exercise your rights because victims of aborted
calls cant identify the company thats calling to ask to be placed on its do-not-call list. Stopping unwanted calls In 1991 Congress passed the federal Telephone Consumer Protection Act to help people reduce the nuisance and
invasion of privacy caused by telemarketing calls and prerecorded sales calls.The more recent federal Telemarketing
Sales Rule sets additional limits on telemarketers. If you dont want a telemarketer to call you again, ask to be put on the companys do-not-call list.The Telemarketing
Sales Rule requires that companies maintain their own do-not-call registries.You must ask each company to place
you on its list. It helps to keep detailed notes about when and whom you asked. In December 2002, the FTC strengthened the Telemarketing Sales Rule and created a national do-not-call registry for
people who do not want to receive telemarketing calls.The do-not-call registry will not be in place before 2004.
Immediately in effect are restrictions on hang-ups (see Whos There?) and a requirement that telemarketers must
display company names and phone numbers to Caller ID users. (Non-profit organizations, political
groups and businesses with whom you
have an established relationship are
exempt from do-not-call lists.) A firm that calls you after specifically
being told not to is liable for $500 in
damages, which you can win by
bringing an action against the company
in your local small claims court. If you have an existing business relationship with a company, it doesnt have to honor your request that it stop
calling you with sales offers. But you can ask anywayfirms have an incentive to respect the wishes of current
customers. You can also write to the Direct Marketing Association and ask it to inform its telemarketing members that you do
not want to receive their calls.Your name remains on file for five years. However, this wont stop all calls because
many companies dont belong to the association.To get on the list, write to the DMA,Telephone Preference Service,
P.O. Box 282, Carmel, NY 10512.There is a $5 processing fee for registering with the Telephone Preference Service
online (http://www.dmaconsumers.org). However, you can print out a form from the web site and mail it to the
organization at no charge. Many states prohibit all telemarketing calls to individuals who have registered on the states do-not-call list.The
Direct Marketing Association maintains a list of state do-not-call sites on its web site (www.the-
dma.org/government/donotcalllists.shtml). DID YOU KNOW? You can sue a telemarketer in small
claims court if you ask to be placed on its do-not-call list
and the company does not comply with your request.
Under the Telephone Consumer Protection Act, you can
sue for your actual monetary loss or up to $500
whichever is greaterfor each call received after you
asked the company not to call again. Californias do-not-call list is expected to be in place in early
2003. When it is operational, you can add your name to the
state-maintained list and, if your request is ignored, the
state can fine the company $500 for the first violation and
$1,000 for subsequent violations.You may still receive
political calls, including those seeking campaign
contributions, and solicitations from non-profit
organizations. For more information about the California do-not-call list, visit the California Office of the Attorney
General web site (http://caag.state.ca.us) and click on Programs & Services. Telemarketing Sales Rule The federal Telemarketing Sales Rule provides some strong legal protections: It prohibits late night/early morning phone solicitations between 9 p.m. and 8 a.m. Telemarketers must tell you up front that they are selling somethingand which company is doing the selling
before they make a pitch. All mentions of promotions, prizes or contests must be accompanied by the disclosure that no purchase is necessary
to enter or win. Telemarketers who promise to repair your credit are banned from accepting any payment before they have
provided you with an amended copy of your credit report. When calling to solicit a credit service, such as a credit card, loan or credit repair service, telemarketers are
prohibited from asking for payment in advance.You need not make any payment until the service has been delivered
satisfactorily. Telemarketers may not use abusive or obscene language, threats or intimidation. They cannot misrepresent goods or services.When selling an investment, telemarketers cannot exaggerate or lie
about its earnings potential, profitability, risk or liquidity. Telemarketers are not allowed to accept payment before you have been given the total cost of the goods or service
and told whether or not the purchase is refundable.
It is illegal for a telemarketer to withdraw money
from your checking account to satisfy a payment
without your written or recorded oral permission. Other federal laws also prohibit: Computer-generated or prerecorded voice phone
messages without your prior consent. Unsolicited faxes sent without a toll-free number
for you to call to tell the sender you dont want to
receive the faxes. Unsolicited sales calls to any line where the
recipient is charged for the callsuch as cell phone
calls or text messages. DID YOU KNOW? It is a sure sign that youre
dealing with scam artists if they offer to
send a messenger or delivery service to
your home to pick up your contribution. Answering sales calls Do not feel you have to be polite. Hang up on
aggressive or harassing callers.
Dont be pressured. Get all the facts, hang up
and talk it over with your spouse and friends. If
the deal is legitimate, theres no need to rush.
Ask the caller to send you information.This will
give you more time to review the offer.
If youre interested, find out as much as you can
about who is calling, and why.Write this
information down along with the time and date
of the call.You will need this information if the
telemarketer continues to call after you asked
him or her not to. Optional services, gadgets & gizmos There are services and products sold to avoid telemarketers calls. Many people use an answering machine to screen
calls. Before buying a product just to avoid telemarketing calls, make sure it will help you. None of these products can
outwit telemarketers or scam artists and they do
nothing to force telemarketers to stop calling: Caller ID. This service is sold by your local phone company. It requires a phone with caller ID
capability or a separate caller ID (identification)
device.The compatible phones have display
screens that show the phone number from which the call is being placed and the name of the person who holds the
account for that number.You may choose to ignore calls from numbers, people or businesses that you do not
recognize. (If you ignore all calls from numbers you dont recognize, you may miss a call from a friend or family
member who is not calling from home.) Caller ID saves the name and number of the last 50-100 calls, which may
help you verify that you were contacted by a telemarketing company after you told it to stop calling you. Privacy screening. A fee-based service is sold to phone customers with caller ID as a way to avoid
missing calls from callers who block display of
their phone numbers, as some telemarketers do.
Any caller with a blocked number is invited to
leave a message and is placed on hold while the
person being called listens to the message and
decides whether to take the call.You also can play
a legally binding announcement asking the caller
to take you off its marketing lists. Gadgets. Some products claim to stop telemarketers.The TeleZapper plugs into your
phone jack and tries to outsmart automatic
dialing programs by answering the call and
emitting the sound of a disconnected line.The
company claims that this fools the computer into
dropping your number from its list. A gadget called the Phone Butler plugs into any
phone jack.When a telemarketer calls, you can
press the star (asterisk) key on your phone and
the Phone Butler takes over. In a prim and proper
British accent, a recording says,Pardon me, this is
the Phone Butler...kindly place this number on
your do-not-call list. Protecting yourself Consider getting an unlisted phone number. An
unlisted number may reduce the number of
unsolicited calls you receive, but it cannot protect
you from marketers who call random combinations
of numbers.
Protect your phone number. Dont print it on your
checks or give it to anyone you dont know well.
Whenever you are asked for your phone number,
ask what it will be used for. Make it clear that you
dont want your phone number to be shared with
marketers.
Voter registration information is available to the
public. Ignore the space that asks for your phone
number or put down unlisted.
Dont give your credit card number and expiration
date to strangers.These can be used to make
unauthorized charges on your card and to make
counterfeit cards.
Dont give your Social Security number to
strangers. It can help a crook get credit in your
name and run up huge bills.
Dont give your bank account number to
strangers. It can be used to make withdrawals
without your permission. TIP:When a stranger or business you dont know
calls you, do not give out your credit card
number, Social Security number, checking
account number or other personal information. How to complain If you have lost money to a telemarketing scam, contact the attorney general of your state, or the district attorney
or consumer affairs agency in your area. If a telemarketer fails to fulfill the requirements of federal telemarketing laws, write to the Federal Trade
Commission (FTC), Correspondence Branch,Washington, DC 20580. For more information, call (877) 382-4357 or
(866) 653-4261 (TTY) or visit the FTC web site (www.ftc.gov). If a telemarketer calls you between 9 p.m. and 8 a.m. or calls again after you have asked to be placed on its do-not-
call list, write to the Federal Communications
Commission.The FCC also handles complaints
about telemarketing calls from outside your state.
Call for instructions before filing a complaint: (888)
225-5322; (888) 835-5322 (TTY).You can send
your complaint to: FCC Consumer & Governmental
Affairs Bureau, Consumer Complaints, 445 12th
Street, SW,Washington, D.C. 20554, or by e-mail
(fccinfo@fcc.gov). For more information, visit the
web site (www.fcc.gov). If the court determines that the company
knowingly broke the law, the maximum penalty
triples, up to $1,500.You can also sue for that
amount if you ask a telemarketing firm for a copy of its written policy on complying with do-not-call requests and
it fails to send you one. The Telemarketing and Consumer Fraud Abuse Prevention Act allows you to sue in federal court if you can show
damages greater than $50,000such large amounts are often involved in investment scams. Helpful resources The American Institute of Philanthropy has a guide that grades charities on their finances and openness with the public. AIP, 4905 Del Ray Avenue, Suite 300W, Bethesda, Maryland 20814, (773) 529-2300. E-mail:
aip@charitywatch.org.Web site: www.charitywatch.org. Ban The Spam (www.banthespam.com) is an online clearinghouse created by Consumer Action, the National Consumers League and the Telecommunications Research and Action Center, where consumers can report unsolicited
commercial e-mail solicitations (junk e-mails, or spam) in order to help federal regulators crack down on e-mail
abuses. Junkbusters (www.junkbusters.com) provides detailed instructions on how to foil unwanted telemarketing calls, as well as how to rid yourself of junk mail, unwanted commercial e-mails (spam) and unsolicited faxes. Online
services only. BBB Wise Giving Alliance (www.give.org) tracks hundreds of charities and evaluates about 250 according to standards that include purpose, financial support, use of funds, annual reporting, accountability and budget, and
publishes the Wise Giving Guide. 4200 Wilson Boulevard, Arlington,VA (703) 276-0100. The National Fraud Information Center , a project of the National Consumers League, has a toll-free hotline (800) 876-7060 Monday-Friday, 9 a.m.-5 p.m. ETto help people learn about fraud and file complaints. It also
provides information on its web site (www.fraud.org) on how to avoid becoming a victim of fraud. DID YOU KNOW? Cell phone telemarketing
known as wireless spammingis prohibited
by federal and certain state laws. Federal law
prohibits unsolicited messages in situations
where the called party is charged for the call.
California law prohibits unsolicited advertising
messages from being sent via fax or e-mail
unless they are clearly labeled as advertising
and provide a toll-free phone number that
allows the recipient to opt out of future
communications. Consumer Action www.consumer-action.org 717 Market Street, Suite 310 San Francisco, CA 94103 (415) 777-9635 TTY: (415) 777-9456 hotline@consumer-action.org 523 W. Sixth Street, Suite 1105 Los Angeles, CA 90014 (213) 624-8327 Consumer Action provides advice and referral on consumer issues. Leave a message anytime and a counselor will call you back. Chinese, English and Spanish are spoken. You can e-mail Consumer Action (hotline@consumer-action.org) or visit its web site (www.consumer-action.org). This publication was created by Consumer Action with funding from SBC.

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