How Telemarketing Scams Work

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Straight Talk About Telemarketing
It’s like clockwork. You sit down to dinner and the phone rings. You answer it. The caller is trying to sell you something or tell you that you’ve won a fabulous prize. If you’re tempted by the offer, get the facts. If you don’t, you may be in for a fraud.

Although most phone sales pitches are made on behalf of legitimate organizations offering genuine products and services, many sales calls are frauds. Consumers lose billions of dollars a year to telemarketing fraud. That’s why the Federal Trade Commission (FTC) encourages you to be skeptical when you hear a phone solicitation and to be aware of a law — the Telemarketing Sales Rule — that can help you protect yourself from abusive or deceptive telemarketers.

How Telemarketing Scams Work

The heart of a fraudulent telemarketing operation is usually a “boiler room,” where seasoned operators try to scam hundreds of thousands of people across the country every day. Telephone fraud knows no race, ethnic, gender, age, education or income barriers. Anyone with a phone can be victimized by telemarketing scam artists.

Cold Calls. Scammers may get your number from a telephone directory, a mailing list or what fraudsters call a “sucker list.” Sucker lists contain information about people who have responded to previous telemarketing solicitations, like their name, phone number, and how much money they spent. The lists are bought and sold by promoters. They are invaluable to scam artists, who believe that consumers who have been deceived once are vulnerable to additional scams.

Direct Mail. You may get a letter or postcard saying you’ve won a prize or a contest. This often is a front for a scam. The instructions tell you to respond to the promoter with certain information. If you do, you’ll be called by a fraudster who may use persuasive sales pitches, scare tactics, and false claims to deceive you and take your money.

Broadcast and Print Advertisements. You may place a call in response to a television, newspaper, or magazine advertisement. The fact that you initiate the call doesn’t mean the business is legitimate or that you should be less cautious about buying or investing on the phone.

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