But wherever honest firms search for new customers, so do
swindlers. Phone fraud is a multi-billion dollar business that
involves selling everything from bad or non-existent investments
to the peddling of misrepresented products and services. Everyone
who has a phone is a prospect; whether you become a victim is
largely up to you.
No matter what questions you ask or how many you ask, skilled
swindlers have ready answers. That's why sales calls from persons
or organizations that are unknown to you should always be checked
out before you actually buy or invest. Legitimate callers have
nothing to hide.
Depending on where they got your name in the first place, they
may know your age and income, health and hobbies, occupation and
marital status, education, the home you live in, what magazines
you read, and whether you've bought by phone in the past.
Even if your name came from the phone book, telephone con men
(and women) assume that, like most people, you would be
interested in having more income, that you're receptive to a
bargain, that you are basically sympathetic to people in need,
and that you are reluctant to be discourteous to someone on the
phone. As admirable as such characteristics may be, they help
make the swindler's job easier. Swindlers also exploit less
admirable characteristics, such as greed.
Their success depends on it. Many are coached to "say
whatever it takes" by operators of the
"boilerrooms" where they work at rows of phone desks
making hundreds of repetitious calls, hour after hour. The first
words uttered by most victims of phone fraud are, "the
caller sounded so believable..."
They offer investments, sell subscriptions, provide products
for homes and offices, promote travel and vacation plans,
describe employment opportunities, solicit donations, and the
list goes on. Never assume you'll "know a phone scare when
you hear one." Even if you've read lists of the kinds of
schemes most commonly practiced, innovative swindlers constantly
devise new ones.
Notwithstanding that most victims are otherwise intelligent
and prudent people, even boilerroom operators express
astonishment at how many people "seem to keep their
checkbooks by the telephone!" Sadly, some families part with
savings they worked years to accumulate on the basis of little
more than a 15-minute phone conversation -- less time than they'd
spend considering the purchase of a household appliance.
It's not uncommon for phone crooks to use direct mailings and
advertise in reputable publications to encourage prospects to
make the initial contact. It's another way swindlers imitate the
perfectly acceptable marketing practices of legitimate
businesses. Thus, just because you may have written or phoned for
"additional information" about an investment, product,
or service doesn't mean you should be any less cautious about
buying by phone from someone you don't know.
Despite efforts of law enforcement and regulatory agencies to
provide what help they can to victims, swindlers generally do the
same thing other people do when they get money: they spend it!
The call may not begin that way, but if the swindler senses
you're not going to be an easy sale, he or she may shift to a
hard sell. This is in contrast to legitimate businesses, most of
which respect an individual's right to be "not
interested."
High-pressure sales tactics take a variety of forms but the
common denominator is usually a stubborn reluctance to accept
"no" as an answer. Some callers may resort to insult
and argument, questioning the prospect's intelligence or ability
to make a decision, often ending with a warning that "you're
going to be very sorry if you don't do such and such." Or,
"you'll never get rich if you don't take a chance."
If it's an investment, the caller may say something like,
"the market is starting to move even as we talk." For a
product or service, the urgency pitch may be that "there are
only a few left" or "the offer is about to
expire." The bottom line is that swindlers often insist that
you should (or must) make your decision right now. And they
always give a reason.
The oldest advice around is still the best: "An offer
that sounds too good to be true probably is." Having said
this, however, you should be aware that some phone swindlers are
becoming more sophisticated. They may make statements that sound
just reasonable enough (if only barely) to keep you from hanging
up. Or they may make three or four statements you know to be true
so that when they spring the big lie for what they're selling,
you'll be more likely to believe that, too. That's where the
verbal camouflage comes in.
A swindler may ask you for your credit card number -- or, in
the most brash cases, several credit card numbers -- for
"identification," or "verification" that you
have won something, or merely as an "expression of good
faith" on your part. Whatever the ploy, once a swindler has
your card number it is likely that unauthorized charges will
appear on your account.
This is likely to be part of their "urgency" pitch.
It could be an effort to avoid mail fraud charges by bypassing
postal authorities or simply a way of getting your money before
you change your mind.
While honest firms may promote free phone offers to attract
customers, the difference with swindlers is that you generally
have to pay in some way to get whatever it is that's
"free." The cost may be labeled as a handling or
shipping charge, or as payment for an item in addition to the
"prize." Whatever you receive "free" -- if
anything -- most likely will be worth much less than what you've
paid.
Except for obligations of the U.S. Government, all investments
have some degree of risk. And if there were any such thing as a
risk-free investment with big profits assured, the caller
certainly wouldn't have to dial through the phone book to find
investors!
Swindlers generally have a long list of reasons: "There
isn't time for that," or "it's a brand new offer and
printed material isn't available yet," or "customer
references would violate someone's privacy." Even with
references, be cautious, some swindlers pay off a few customers
to serve as references.
The caller may also be reluctant to answer questions by phone --
such as inquiries about the firm or even how and where you can
contact the firm. The swindler may insist on contacting you
"for your convenience."
Trust is a laudable trait, but it shouldn't be dispensed
indiscriminately -- certainly not to unknown persons calling on
the phone and asking that you send them money. Even so,
"trust me" is a pitch that swindlers sometimes employ
when all else fails.
No matter what you're told to the contrary, the reality is
that at least 99 percent of everything that's a good deal today
will still be a good deal a week from now! And the other one
percent isn't generally worth the risk you'd be taking to find
out.
There may be times when you'll want to make a prompt decision,
but those occasions shouldn't involve an irrevocable financial
commitment to purchase a product or make an investment that
you're not familiar with from a caller that you don't know. And
purchase decisions should never be made under pressure.
For legitimate firms, this shouldn't be a problem. Swindlers,
however, may not want to give you time for adequate
consideration, may not have written material available, or may
not want to risk a run-in with legal or regulatory authorities by
putting fraudulent statements in writing.
Also insist on having enough time to study any information
provided before being contacted again or agreeing to meet with
anyone in person. Some high-pressure telephone sales calls are
solely for the purpose of persuading you to meet with an even
higher-pressure sales person in your home!
A beauty of the American economy is the diversity of
investment vehicles and other products available. But it's a
diversity that includes the bad as well as the good. Unless you
fully understand what you'd be buying or investing, you can be
badly burned. Swindlers intentionally seek out individuals who
don't know what they are doing! They often attempt to flatter
prospects into thinking they are making an informed decision.
And if you get an answer, ask for a phone number or address
that you can use to contact the agency and verify the answer
yourself. If the firm says it's not subject to any regulation,
you may want to increase your level of caution accordingly.
If you assume a firm wouldn't provide you with information,
references, or regulatory contacts unless the information was
accurate and reliable, that's precisely what swindlers want you
to assume. They know that most people never bother to follow
through. Look at it this way: Most victims of fraud contact a
regulatory agency after they've lost their money; it's far better
to make the contact and obtain whatever information is available
while you still have your money.
Swindlers don't want you to seek a second opinion. Their
reluctance or evasiveness could be your tip-off.
If there's a guarantee or refund provision, it's best to have
it in writing and be satisfied that the business will stand
behind its guarantee before you make a final financial
commitment.
They may involve nothing more than someone being paid a fee to
speak well of a product or service.
That goes especially for your credit card numbers and bank
account information. The only time you should give anyone your
credit card number is if you've decided to make a purchase and
want to charge it. If someone says they'll send a bill later but
they need your credit card number in the meantime, be cautious
and be certain you're dealing with a reputable company.
If you're simply not interested, if you become subject to
high-pressure sales tactics, if you can't obtain the information
you want or get evasive answers, or if you hear your own better
judgment whispering that you may be making a serious mistake,
just say good-bye.
Credit: SWINDLERS ARE CALLING is prepared as
a service to the public by:
National Partners Association
Public Affairs and Education
200 West Madison Street
Suite 1600
Chicago, Illinois 60606-3447
800-621-3570
800-572-9400 (in Illinois)
in association with:
Commodity Futures Trading Commission
2033 K Street, N.W.
Washington, DC 20581
Federal Trade Commission
6th & Pennsylvania Avenue, N.W.
Washington, DC 20580
Alliance Against Fraud in Telemarketing
c/o National Consumers League
815 15th Street, N.W.
Suite 516
Washington, DC 20005
202-639-8140