Top Ten Telemarketing Scams of 2006

By Carol Johnson

When you answer the phone and hear a voice delivering you a sales pitch, you may be one of those people who just hang up. You may be a wise consumer who, before hanging up, asks to be placed on a Do Not Call list. Hopefully you are not one of the thousands of people who fall victim to criminals who use the phone to rob people.

The National Fraud Information Center/Internet Fraud Watch is operated by the National Consumers League, the oldest nonprofit consumer organization in the United States. The mission of the NFIC/IFW is to provide consumers with all the information they need to avoid falling prey to criminal telemarketers who are out to rob innocent people of their money by disguising themselves as reputable companies selling a product or service.

Fake check scams are now the #1 telemarketing offense reported to the NCL, and the trend has lately been shifting toward variations of the fake check scam, including sweepstakes and fake lottery winnings. A consumer may receive a letter trumpeting congratulations on winning something, along with a check and a telephone number they can call to learn about paying the "customs fees" or "taxes" on their winnings.

The NFIC/IFW compiled a list of the top ten telemarketer scams of 2006, and the list and supporting data are posted on their website. Consumers who fell for a fake check scam in 2006 lost an average of $3,278, more than losses to any other frauds listed in the NCL’s top-ten list of telemarketer scams. The use of money transfers to send money to fraudulent telemarketers has increased, especially in fake check scams, lotteries and sweepstakes, and advance fee loans.

People age 60 and older were particularly vulnerable to prizes and sweepstakes, magazine sales scams, and "phishing," where a crook attempts to acquire sensitive information such as credit card information by masquerading as a trustworthy telemarketer. People under age 30 were not as susceptible to telemarketing fraud, but the ones who were found themselves especially attracted to offers to borrow or make money, work-at-home plans, advance fee loans, and fake credit card offers.

Almost half of the telemarketing fraud reports were from foreign crooks targeting people in the United States. Most of the foreign crooks were hawking lotteries, fake checks, and prizes or sweepstakes. In many of the telemarketing scam categories—phishing, scholarships and grants, prizes or sweepstakes, travel or vacation packages, and fake check scams—the victims did not know where the crooks were located, but many of the fraudulent operations were likely based in foreign countries.

The top ten telemarketing scams of 2006, according to the NFIC/IFW, were:

1. Fake Check Scams where consumers paid with phony checks and instructed to wire money back.

2. Prizes/Sweepstakes where consumers were requested to pay to claim prizes that never materialized.
Requests for payment to claim prizes that never materialize

3. Magazine Sales calls where the crook misrepresents the cost of a subscription or claims to be a publisher offering a subscription renewal.

4. Scholarships/Grants that promise to help consumers get scholarships or government grants for education, for a fee.

5. Advance Fee Loans that promise business or personal loans, for an up-front fee, even if you have bad credit.

6. Lotteries/Lottery Clubs that say you’ve won a lottery—often a foreign lottery—but you have to send a payment in order to claim your winnings.

7. Credit Card Offers that promise consumers approval of a credit card even if they have bad credit.

8. Phishing calls portraying themselves as a well-known company, asking to confirm personal information such as social security numbers, bank account information, or credit card account numbers.

9. Work-at-Home Plans that offer to sell materials based on false promises of being able to make large sums of money working from home.

10. Travel/Vacation offers of free or discount travel for a fee, only to have the travel packages never materialize.

The NFIC/IFW website offers useful information to help consumers protect themselves by learning how to recognize the danger signs if they are contacted by an illegitimate telemarketer. The site can also help you get complaints to law enforcement agencies easily and quickly so they can shut down the fraudulent operation.