Consumer Publications List

Telemarketing Scams

• A Laurel man received a call from a telemarketer who offered him gifts and then asked him to renew a magazine subscription. The man agreed and gave the caller his checking account routing number. When the caller told him the renewal would cost $300, the consumer told the telemarketer not to withdraw the money from his account. Nevertheless, his next bank statement showed a withdrawal of $300. The man contacted the Consumer Protection Division and the company agreed to refund the money.
• A Silver Spring woman received a call from a telemarketing company that offered her an opportunity to save money on food, jewelry, vision care, and other items. They also told her they would send her large checks, totaling as much as $25,000. But the telemarketers repeatedly asked her to send them money before she received her prizes. In the end, she spent her life savings - more than $21,000 - and received only a few hundred dollars worth of merchandise she neither needed or wanted. After she contacted the Consumer Protection Division, the company agreed to refund $7,500.

Telemarketing fraud robs consumers of approximately $40 billion every year. In 1995, the Federal Trade Commission passed a new regulation aimed at stopping telemarketing scams. The new regulation:

Prohibits telemarketers from calling before 8 a.m. or after 9 p.m., and from calling consumers who have told that telemarketer they don't want to be called.

Requires that telemarketers promptly disclose their identity, the purpose of the call, the nature of the goods or services being sold, the odds of winning prizes if any are offered, the fact that no purchase is necessary to participate, and the method by which a consumer can enter without making a purchase.

Requires that telemarketers disclose refund and cancellation policies and tell consumers if refunds and exchanges are not allowed.

Unless you are totally familiar with the service being sold and you have previously done business with the company, be wary of paying in advance for services you will receive at a later date. The new regulation specifically bars telemarketers who sell credit repair, advance fee loan or recovery services from collecting a fee until seven days after the service has been performed.

Tougher regulations help, but you must continually exercise caution to avoid telemarketing scams. Fraudulent telemarketers pay no attention to laws, and until they are caught by the authorities, they continue to defraud people.But there are ways you can protect yourself:

• Never give your credit card number over the phone unless you initiated the call.
• Never give your checking account number or any of the other numbers on your checks over the phone.
• Never give a telemarketer personal information about yourself, including medical information or driver's license, social security or telephone calling card number.
• Never pay for a prize. That includes paying postage, shipping and handling or any costs associated with something a caller says you have"won."
• Never allow a caller to pressure you into acting immediately on any offer. If the telemarketer insists that you act the same day, besuspicious.
• Never agree to any offer until you have seen it in writing. Ask the caller to send you information in the mail. If he will not, be suspicious.

Dishonest telemarketers constantly come up with new ways to woo consumers into giving them money. One relatively new form of fraud is known as "recovery room scams." In these scams, telemarketers call consumers they know have been victims of fraud and offer to help get their money back - for a fee. Here is a recent example:

The Federal Trade Commission recently filed charges against telemarketers who falsely identified themselves as affiliates of a government consumer protection agency, called elderly people who had been victims of telemarketing scams and offered to help them get their money back. Consumers were told that for 5 or 10 percent of what they lost, the caller would recovery their lost money. Consumers paid $200 to $1,000 relying upon the caller's representation that he was affiliated with the government, but they never recovered any money - they only lost more.

Remember, if you get a call from a stranger offering you a terrific deal, don't agree to pay any money until you have had time to check out the caller. You can contact our office for information. If the caller says you must act right away, it is probably a telemarketing scam. People making legitimate offers are always willing to give you time to think and gather information.

December 1995

Maryland Attorney General's Consumer Protection Division Consumer hotline: (410) 528-8662 or 1 (888) 743-0023 toll-free