Hang Up On Cross-Border
Phone Fraud
Cross-border telemarketing
fraud is a serious problem - and it appears to be growing. U.S. and
Canadian consumers lose billions of dollars a year to telemarketers who
pitch bogus products, services and investments. The most common
cross-border telemarketing frauds involve:
- phony prize promotions
- foreign lottery schemes
- advance-fee loan rip-offs
- travel offer scams
- unnecessary credit card loss
"protection"
It's no wonder that con artists often
target citizens of other countries. Some con artists believe they won't
get caught if they target citizens in another country. They assume that
their own country's law enforcement officials aren't interested in
building a case when the victims are in another country. They also
believe that officials in the victims' country won't have the authority
to investigate deceitful calls from outside their borders.
But now partnerships among law enforcement agencies in the U.S. and
Canada are making it tougher for cross-border scam artists to ply their
deceitful trade. The organizations cooperate across borders - sharing
information, investigators and other resources. All the partners gather
consumer complaint information and contribute to the legwork involved in
building a case, including surveillance and interviewing victims. As a
result, more boiler rooms are being shut down, and faster.
Consumers who report their complaints about cross-border telemarketing
fraud are providing information that is critical to shutting down the
boiler rooms. The FTC enters Internet, telemarketing, identity theft and
other fraud-related complaints into Consumer Sentinel, a secure, online
database available to hundreds of civil and criminal law enforcement
agencies in the U.S., Canada and abroad. If you experience telemarketing
fraud of any type, report it. If you are in the U.S., contact the FTC
toll-free at 1-877-FTC-HELP (1-877-382-4357) or complain online at
www.ftc.gov. Consumers in Canada are
encouraged to contact PhoneBusters toll-free at 1-888-495-8501, or fax
1-888-654-9426 or email
info@phonebusters.com.
Sure, con artists are still swindling consumers with the tried and true
pitches for bogus sweepstakes and phony charities. But telephone
hucksters also are playing on consumers' financial vulnerabilities and
economic uncertainty. Here are a few of the telemarketing pitches that
just don't ring true.
Phony Prize Promotions and Sweepstakes Schemes
"You're a WINNER!!!"
Often telemarketers,
including those operating across national borders, "guarantee" that
you've won valuable prizes, such as vacations, automobiles or large sums
of cash, but want you to pay "fees" for shipping, taxes, customs, or
other non-existent expenses. Beware of anyone who asks you to pay to
claim a "prize" or "free" gift. You may not receive anything at all, or
you may get a cheap gift that is worth far less than the "fees" that you
have paid.
Some sweepstakes scams draw you in by claiming that you're a winner.
Then they tell you that your chance of getting better prizes will grow
if you first pay "entitlement fees" to qualify for larger winnings. You
may even receive a small item as an inducement to get you to send even
more money.
Some rip-off artists target consumers who have previously lost money to
illegal foreign sweepstakes schemes. They tell the victims that the
government has won a lawsuit against the company that originally scammed
them. The victims are told that they need to first pay legal fees or
taxes to the government in order to regain their money.
If you receive an unsolicited call telling you that "You're a winner,"
remember:
- Don't pay for a "free" prize or gift.
Free is free.
- Don't share your credit card and bank
account numbers. Scam artists often ask for them during an unsolicited
sales pitch, and then use them to commit other frauds against you.
- If you are approached to pay money to
recover funds that you are owed, independently contact the appropriate
government agency to check out those claims.
International Lottery Scams
"Congratulations!
You may receive a certified check for up to $400,000 U.S. CASH!
One Lump sum! Tax free!
Your odds to WIN are 1-6."
Hang onto your wallet. It's a fraud. Scam
operators are using the telephone and direct mail to entice consumers to
buy chances in high-stakes foreign lotteries from as far away as
Australia and Europe.
Most promotions for foreign lotteries are likely to be phony. Many scam
operators don't even buy the promised lottery tickets. Others buy some
tickets but keep the "winnings" for themselves. In addition, lottery
hustlers use victims' bank account numbers to make unauthorized
withdrawals or their credit card numbers to run up additional charges.
U.S. federal law enforcement authorities are intercepting and destroying
millions of foreign lottery offers before they reach consumers.
If you're thinking about responding to a foreign lottery, don't do it.
- Ignore all mail and phone
solicitations for foreign lottery promotions. If you get what looks
like lottery material from a foreign country, turn it over to your
local postmaster in the U.S. or to the Competition Bureau in Canada.
- By responding to just one foreign
lottery offer, you've opened the door to many more bogus offers for
lottery or investment "opportunities." Your name will be added to
"sucker lists" that fraudulent telemarketers buy and sell.
- In both the U.S. and Canada, it's
illegal to play a foreign lottery - through the mail or on the
telephone or Internet. Don't add insult to injury by inviting federal
charges.
Advance-Fee Loan "Sharks"
"The caller said he
could get me a loan, no questions asked, so I could pay off some bills.
I just needed to pay him $250 up front and he'd do the rest. I gave him
my credit card number, but that was the last I heard from him. Now I'm
out the $250 and I still owe my creditors."
A different breed of "loan
shark" is preying on unwary consumers by taking their money for the
promise of a loan, credit card or other extension of credit.
Advertisements and promotions for advance-fee loans suggest that there's
a high likelihood of success that the loan will be granted, regardless
of your credit history. But to take advantage of the offer, you have to
pay a fee first. And that's the catch: You pay the fee, the scam artist
takes off with your money and the loan never materializes.
Legitimate guaranteed offers of credit don't require payments up front.
Legitimate lenders may require that you pay application, appraisal or
credit report fees, but these fees seldom are required before the lender
is identified and the application is completed. In addition, the fees
generally are paid to the lender, not to the broker or person who
arranged the "guaranteed" loan.
Legitimate lenders may guarantee firm offers of credit to creditworthy
consumers, but they rarely do it before evaluating a consumer's
creditworthiness.
Advertisements for advance-fee loans generally appear in the classified
section of daily and weekly newspapers and magazines. Often, the ads
feature "900" numbers, which result in charges on your phone bill.
Advance-fee loans also are promoted through direct mail and radio and
cable TV spots. Remember that just because an ad appears in a media
outlet that you recognize - like your local newspaper or radio station -
it's no guarantee that the company behind the ad is legit.
What to do when you see an ad guaranteeing a loan for an advance fee:
- Don't pay for a promise. In most
jurisdictions, it's illegal for companies doing business by phone to
promise you a loan and ask you to pay for it before they deliver.
- Ignore any ad - or hang up on any
caller - that guarantees a loan in exchange for an advance fee.
Legitimate lenders never "guarantee" or say that you will receive a
loan before you apply, especially if you have bad credit or no credit
record.
- Never give your credit card or bank
account numbers, Social Security number, Social Insurance Number, or
other identifying number on the telephone unless you are familiar with
the company and know why the information is necessary.
Credit Card Loss Protection Offers
"I got a call from a
woman who said I need credit card loss protection insurance. I thought
there was a law that limited my liability to $50 for unauthorized
charges. She said the law had changed and that now, people are liable
for all unauthorized charges on their account. Is that true?"
No. Don't buy the pitch - and don't buy
"loss protection" insurance. Telephone scam artists are lying to get
people to buy worthless credit card loss protection and insurance
programs. If you didn't authorize a charge, don't pay it. Follow your
credit card issuer's procedures for disputing charges you haven't
authorized. In the United States, your liability for unauthorized
charges remains at $50. In some provinces of Canada, you may have no
liability at all.
Worthless credit card loss protection is a popular offering for
promoters trying to exploit consumer uncertainty. Avoid doing business
with callers who claim that:
- you're liable for more than $50 in
unauthorized charges on your credit card account;
- you need credit card loss protection
because computer hackers can access your credit card number and charge
thousands of dollars to your account;
- a computer bug could make it easy for
thieves to place unauthorized charges on your credit card account; and
- they're from "the security department"
and want to activate the protection feature on your credit card.
Identity Theft
Don't give out personal information -
including your credit card or bank account numbers - over the phone or
online unless you're familiar with the business that's asking. Scam
artists can use your personal information to commit fraud, such as
identity theft - one of the fastest-growing white-collar crimes in North
America. That's where someone uses your personal information, such as
your credit card account number, Social Security number, or other
identifying number, mother's maiden name, or birth date, without your
knowledge or permission to commit fraud or theft.
Trip Traps
"Hello...you have been
specially selected to receive our SPECTACULAR LUXURY DREAM VACATION
offer!"
Don't get that passport
photo just yet. While some travel opportunities sold over the phone are
legitimate, many are scams that target consumers in another country. The
word "offer" can be a clue to hidden charges.
The salesperson may ask for your credit card number to bill your account
for the travel package. Once you pay, you get the details of the
"package," which usually include instructions for making trip
reservation requests. Your request often must be accompanied by yet
another fee. In addition, many offers require you to pay upgrade costs
to get the actual destinations, accommodations, cruises, or dates you
were promised. Some offers may require you to pay more for port charges,
hotel taxes or service fees.
See a pattern developing? New charges are being added every step of the
way. You may never get your "bargain" trip because your reservations may
not be confirmed or because you must comply with hard-to-meet hidden or
expensive "conditions."
Unpleasant surprises can ruin a vacation, especially when they cost
money. That's why it pays to investigate a travel package before you
buy. Consider these travelers' advisories:
- Be wary of "great deals" and
low-priced offers. Few legitimate businesses can afford to give away
products and services of real value or substantially undercut other
companies' prices.
- Don't be pressured into buying.
Legitimate businesses don't expect you to make snap decisions.
- Ask detailed questions. Find out
exactly what the price covers and what it doesn't. Ask about
additional charges. Get the names of the hotel, airports, airlines,
and restaurants included in your package. Consider contacting these
businesses directly to verify arrangements. Ask about cancellation
policies and refunds. If the salesperson can't give you detailed
answers, hang up.
Putting Cold Calls on Ice
What are some examples of deceptive
telemarketing?
- Charging you for a non-existent or
misrepresented product, service or charitable gift.
- Getting your private banking
information or credit card number in order to steal.
- Offering you a "prize" for which you
must pay money.
- Taking your money fraudulently in any
way.
So just how did they get your number?
Fraudulent telemarketers may get your phone number from a telephone
directory, mailing list or "sucker" list. Sucker lists include names,
addresses, phone numbers - even how much money you may have spent on
telemarketing scams in the past. Unscrupulous promoters buy and sell
sucker lists on the theory that consumers who have been deceived once
are easy prey for additional scams.
You may not be able to put a freeze on cold calls, but you can learn how
to spot those that spell f-r-a-u-d. Here's how: Be cautious.
- Say no to high-pressure sales tactics.
If you are pressured into making a decision immediately, it's probably
not a legitimate deal. Legitimate businesses respect the fact that
you're not interested.
- Take your time when you're presented
with a sales "opportunity." Ask for written information about the
product, service, investment opportunity, or charity that's being
pitched. Don't talk with a salesperson if it's not convenient for you.
A reputable salesperson should be willing to call you back at a time
you choose.
- Talk to a friend, relative or
financial advisor before you respond to a cold call. Any investment
you make may have serious financial consequences for you - and the
people you care about.
- Hang up if you're asked to pay for a
prize. Free is free.
- Don't send money - cash, check or
money order - by courier, overnight delivery or wire to anyone who
insists on immediate payment.
- Keep information about your bank
accounts and credit cards to yourself - unless you know who you're
dealing with.
- Check out the company with your state,
provincial and local consumer protection office before you buy any
product or service, or donate money.
- Hang up if a telemarketer calls before
8 a.m. or after 9 p.m. That's a tip-off to a rip-off.
- Tell callers to take your name off
their contact lists if you don't want to hear from them again. If they
call back you can feel comfortable hanging up. It's not rude - it's
smart.
File a Complaint
In The U.S.
Federal Trade Commission
The FTC works for the consumer to prevent
fraudulent, deceptive and unfair business practices in the marketplace
and to provide information to help consumers spot, stop and avoid them.
To file a complaint or to get free information on consumer issues, visit
www.ftc.gov or call toll-free,
1-877-FTC-HELP (1-877-382-4357). The FTC enters Internet, telemarketing,
identity theft and other fraud-related complaints into Consumer
Sentinel, a secure, online database available to hundreds of civil and
criminal law enforcement agencies in the U.S. and abroad. Check out the
FTC website for more information about your rights under the FTC's
Telemarketing Sales Rule and ways to protect yourself from abusive and
deceptive telephone sales practices.
U.S. Postal Inspection Service
The U.S. Postal Inspection Service is one
of the U.S.'s oldest federal law enforcement agencies. As the law
enforcement arm of the United States Postal Service, the U.S. Postal
Inspection Service enforces more than 200 federal laws covering
investigations of crimes that adversely affect or fraudulently use the
U.S. mail and postal system.
In Canada
Competition Bureau
The Competition Bureau targets
telemarketing and mail scams aimed at Canadian and foreign consumers. To
file a complaint, call the Competition Bureau at 1-800-348-5358
(available only to callers in Canada) or PhoneBusters at 1-888-495-8501.
Register complaints online about deceptive business practices at
www.competition.ic.gc.ca.
Ontario Ministry of Consumer and Business Services
The Ontario Ministry of Consumer and
Business Services, located in Toronto, works with other law enforcement
agencies to combat deceptive telemarketing and cross-border fraud. It is
illegal under Ontario law for a loan broker to accept a fee for any
reason before providing a loan. If you are a victim of a loan scam
operating from Ontario, please contact PhoneBusters.
PhoneBusters
PhoneBusters is Canada's central agency
that collects information on telemarketing complaints received from
throughout Canada and the U.S. against Canadian deceptive telemarketers
and disseminates this information to the appropriate enforcement agency.
The data collected is a valuable tool in evaluating the effects of this
fraud on the public and preventing future crimes. PhoneBusters is
coordinated by the Ontario Provincial Police Anti-Rackets in partnership
with the Royal Canadian Mounted Police/G.R.C. If you want to report a
fraud, or if you need more information, contact PhoneBusters at
1-888-495-8501, fax 1-888-654-9426 or email
info@phonebusters.com. The
toll-free numbers are good throughout Canada and the continental U.S.
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
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