Telephone Fraud and Telemarketing Scams

For more information on telephone fraud and telemarketing scams, select the source and summary below:

Informational Publications and Websites: 

1. Federal Trade Commission - Phone Scams

Every year, thousands of people lose money to telephone scams — from a few dollars to their life savings. Scammers will say anything to cheat people out of money. Some seem very friendly — calling you by your first name, making small talk, and asking about your family. They may claim to work for a company you trust, or they may send mail or place ads to convince you to call them. If you get a call from someone you don’t know who is trying to sell you something you hadn’t planned to buy, say "No thanks." And, if they pressure you about giving up personal information — like your credit card or Social Security number — it’s likely a scam. Hang up and report it to the Federal Trade Commission. The FTC provides information on why they are calling you, how to handle an unexpected sales call, and what to do about pre-recorded calls.

2. Federal Communications Commission - Do Not Call List

        Has your evening or weekend been disrupted by a call from a telemarketer? If so, you’re not alone. The Federal Communications Commission (FCC) has been receiving complaints in increasing numbers from consumers throughout the nation about unwanted and uninvited calls to their homes from telemarketers. Pursuant to its authority under the Telephone Consumer Protection Act (TCPA), the FCC established, together with the Federal Trade Commission (FTC), a national Do-Not-Call Registry. The registry is nationwide in scope, applies to all telemarketers (with the exception of certain non-profit organizations), and covers both interstate and intrastate telemarketing calls. Commercial telemarketers are not allowed to call you if your number is on the registry, subject to certain exceptions. As a result, consumers can, if they choose, reduce the number of unwanted phone calls to their homes.

3. Better Business Bureau - Be on the Lookout for These Common Telephone Scams

If you have a phone then you most likely have been the target, or possibly the victim, of scam or fraud. While many scammers have started targeting consumers via email and text messages, the telephone, which is easy and cost-effective, is still their weapon of choice. Even if you are  on the federal Do Not Call Registry, this might not stop crooks who are out to steal your money or identity. These scammers come up with clever schemes to trick unsuspecting consumers, however a large majority of these individual scams fall under one of the following categories: prize/sweepstakes scams, phishing scams, fake check scams and recovery/refund scams. Know what to expect for each of these common phone scams in order to protect yourself, your money and your identity.

4. - Telemarketing Fraud

While there are many legitimate companies that use the telephone for marketing, consumers and business lose millions of dollars to telemarketing fraud each year. It's sometimes hard to tell the difference between reputable telemarketers and criminals who use the phone to rob people. You can protect yourself by learning how to recognize the danger signs of fraud. If you are a victim or attempted victim of telemarketing fraud, it's important to report the scam quickly so that law enforcement agencies can shut the fraudulent operation down.

5. - The Top Five Tricky Retiree Phone Scams

        Con artists love the telephone. They also love targeting seniors who often have more time and money than other consumers. While some scams may be readily apparent, others are harder to identify. Bankrate provides the top five tricky phone scams that target retirees.

Scholarly Articles, Research, and Analysis:

1. National Crime Prevention Council, Seniors and Telemarketing Fraud 101 (2006)

If you’re a senior, you may find yourself bombarded with telephone calls from telemarketers offering you everything from “fantastic investment opportunities” to home repairs (for an unbelievably low price). The callers always seem nice, and their offers can seem irresistible. Well, that’s a clue, because if it sounds too good to be true, it probably is: Most of these incredible offers aren’t on the level.

This booklet is designed to help you sort through these telemarketing offers so you can

recognize which offers are on the up-and-up and which are probably scams. It will also tell you about a variety of things you can do if you get one of these calls, including the simplest thing of all—just hanging up. Many seniors like you are proving that, armed with the right education, they can spot these criminals and protect themselves from their schemes. They are proving that they can be as clever as the con artists, as astute as necessary to detect deception, and as confident as need be to keep from being fleeced. Please read this booklet and take to heart the tips and techniques it offers. Remember, when it comes to hanging up on telemarketing fraudsters, it isn’t rude, it’s shrewd.

Free Online Copy

2. Consumer Federation of America, Protect Yourself From The “Grandparent Scam”

You get a call or an email unexpectedly from someone who claims to be a friend or relative. This often happens to grandparents with the caller claiming to be their grandson or granddaughter. The caller says there’s an emergency and asks you to send money immediately. But beware, there’s a good chance this is an imposter trying to steal your money! This fact sheet has tips to avoid becoming a victim of fraud.

Free Online Copy

3. National Center for Victims of Crime, Telemarketing Fraud Against Seniors (2006)

        Every year, Americans lose more than $40 billion to telemarketing fraud. More than one-half of the victims of these crimes are older people. Illegal telemarketers direct anywhere from 56 to 80 percent of their calls at older consumers. As the number of Americans over age 65 dramatically rises in the next two decades, seniors will become an increasingly inviting target for criminals who steal with telephones. Studies show that many older people do not make the connection between illegal telemarketing and crime. They may not understand that dishonest telemarketers are not shrewd business people but criminals who are trying to steal their life savings. This article provides an analysis of telemarketing fraud in the following sections:

Free Online Copy

4. Charles Duhigg, Bilking the Elderly, With a Corporate Assist, New York Times Business (May 20, 2007)

        This article tells the story of Richard Guthrie, 92, who was tricked into giving banking data to telephone callers, who then stole money from his account. It discusses how Mr. Guthrie’s name, after he entered a few sweepstakes, was entered into a database and then sold by infoUSA, one of the largest compilers of consumer information. According to investigators, infoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers. It advertised lists of “Elderly Opportunity Seekers” - 3.3 million older people “looking for ways to make money” - and “Suffering Seniors” - 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe their luck can change.”

Free Online Copy of the Full Story

5. Mary E. Didier, Kevin R. Blackwell, Paul J. Desio et al, Telemarketing Fraud Working Group Report to the Commission, United States Sentencing Commission (January 1998)

Congress enacted, on September 14, 1994, a statutory enhancement providing additional five-and ten-year penalty increases for telemarketing fraud conduct. See Part IIA for a detailed description of this enhancement. Congress is likely to address this area again, as indicated by a spate of related legislative initiatives directing the Commission to add various guideline enhancements for telemarketing fraud conduct. In light of these developments, a staff working group was constituted to conduct a detailed study of telemarketing fraud offenses in conjunction with the Commission’s multi-year comprehensive assessment of the fraud and related guidelines.

The working group has reviewed the current operation of the guidelines and determined that they presently take into account a number of harms and culpability concerns related to fraud offenses and elderly victims. The fraud guideline encompasses numerous fraud statutes and operates by assessing the seriousness of the harm caused by a fraud offense. The guideline rationalizes the sentencing of these fraud offenses so that fraudulent criminal conduct of comparable severity is sentenced similarly. The generally applicable vulnerable victim guideline responds to situations in which defendants knew or should have known of their victims’ vulnerability, including vulnerability due to age. In addition, sentencing enhancements exist for factors such as causing harm to more than one victim and misrepresenting that the defendant was acting on behalf of a charitable organization. Moreover, courts are invited to depart and sentence higher than the guideline range in other circumstances that potentially could involve elderly victims.

The working group also conducted an empirical analysis of telemarketing fraud sentences and application of the statutory enhancement. Recognizing the inherent limitations on the current data assessment effort (see infra Part IVA), the following preliminary observations can be made:

Free Online Copy

6. AARP Foundation, OFF THE HOOK: Reducing Participation in Telemarketing Fraud, Report for the United States Department of Justice, Office of Justice Programs (2003)

        In 2000, the Department of Justice (DOJ) funded a grant to the AARP Foundation and the

American Prosecutor’s Research Institute - National District Attorneys Association to create a curriculum and deliver training to district attorneys regarding telemarketing fraud prevention and education. DOJ awarded a supplement grant to AARP in May 2001 to initiate new research to develop information about current victims and investigate best tactics to help consumers resist fraudulent pitches. This report includes findings from three separate but interrelated research activities conducted under that supplemental grant to identify the causes of telemarketing fraud victimization and suggest ways it might be prevented. All were undertaken in 2001 and 2002.

Free Online Copy