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White-Collar Crime - Telemarketing Fraud

telemarketers credit card fraudulent

In the 1990s and early 2000s, telemarketing (selling items over the phone) fraud cost consumers billions of dollars. The typical telemarketing call would come around dinnertime with a sincere voice promising free gifts and vacations. All a person has to do to receive a prize is purchase an amazing water purifier, vitamins, or other product by credit card or check. Free prizes plus the purchase of a seemingly wonderful item seems like too good of an offer for some to turn down. Neither the purchased item nor the prize, however, would ever arrive since they never existed. The telemarketers would make up a scheme and simply take the purchaser's money. In addition, the buyers would probably end up on a list of susceptible victims passed around to other scam telemarketers. If an individual falls for a scam once, it is possible he or she will do so again.

People making calls in an effort to warn others that they may be targets of fraudulent telemarketers. (AP/Wide World Photos)

Individuals committing telemarketing fraud use multiple names, phone numbers, addresses, product lines, and prepared scripts. They can change these overnight, making arrests difficult. The FBI reports that senior citizens are particularly vulnerable and likely to fall for scams.

While telemarketing scams still offer free prizes and vacations frequently, they prey on economic uncertainties. A favorite telemarketing fraud involves credit card loss protection. Although federal law limits an individual's legal responsibility or liability for unauthorized credit card charges to $50, fraudulent telemarketers will tell cardholders they will be held responsible or liable for all unauthorized charges. They claim everyone needs credit card loss insurance should criminals get access to a card number and charge thousands of dollars before the owner realizes it. The scammers offer loss protection insurance for a fee that can be charged to a credit card. If successful, the fraudulent telemarketer has managed to get money from the victim, as well as his or her credit card number.

Another frequently used telemarketing scam is the advance-fee loan. Telemarketers target people with poor credit and offer loans to pay off debt for a small amount of money due immediately. Once the fee is collected the scammer disappears.

Through the 1990s and early 2000s, the FBI carried out a number of successful operations against telemarketing scams. Together with retired FBI agents and volunteers from the American Association of Retired Persons posing as vulnerable elderly citizens, the FBI set up operations to catch fraudulent telemarketers. The marketers would call numbers thinking they were targeting people who had fallen for scams before. The volunteers recorded the solicitations and prosecutors were able to use these recordings to arrest the telemarketers for fraud.


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