Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

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Telemarketing Fraud
Due to growing abuses by some telemarketers, new laws regarding telemarketing fraud were established.

These new laws not only amend the existing deceptive business practice statute to include additional fraudulent practices such as investment scams and bogus prize promotions, but they also provide for harsher penalties where an elderly victim is involved (18 Pa.C.S.) § 4107(a), (c).. A violation of this law involving amounts exceeding $2,000, or more than $200 for victims 60 years of age or older, constitutes a felony of the third degree. It is punishable by a $15,000 fine, and/or imprisonment of up to seven years for each count.

These amendments give the county district attorneys of the Commonwealth the authority to investigate and to institute criminal proceedings for deceptive or fraudulent business practices. This law also allows the Pennsylvania Attorney General to institute criminal proceedings for any such violation involving more than one county of this Commonwealth, or involving any county of this Commonwealth and another state.

State law enforcement officers now have the power to pursue fraudulent telemarketers who operate across state lines. During the summer of 1997, a joint investigation between the Pennsylvania Attorney General's Office and the United State Postal Inspection Service resulted in the break up and arrest of a sophisticated Atlanta, Georgia based telemarketing ring which had defrauded numerous senior citizens in several states of hundreds of thousands of dollars.

Victims of this particular scam were telephoned and told that they were million dollar sweepstakes winners. Names of legitimate organizations such as Publishers Clearinghouse and American Family Publishers, as well as names of celebrities commonly associated with these types of promotions, e.g., Dick Clark and Ed McMahon, were used to lend credibility to the calls. Prior to receiving their "winnings," victims were each told to send thousands of dollars to addresses in the Atlanta, Georgia area. This money was required, according to the telemarketers, to cover expenses associated with the award and delivery of the money, or to prepay taxes. Once victims complied with these requests, the telemarketers continued to contact the victims with additional excuses for demanding more money. The telemarketers would continue to call these victims until it was clear that no more money was forthcoming.

Common Scams
In addition to sweepstakes scams, other common schemes used by unscrupulous telemarketers include the following:

Prize Offers: You usually have to do something to get your "free" prize - - attend a sales presentation, buy something, or give out a credit card number. The prizes are generally worthless or overpriced.

Travel Packages: "Free" or "low cost" vacations that end up to be quite expensive with all their hidden costs. Or, they may never happen. You may pay a high price for some part of the package - - like hotel or airfare. The total cost may run two to three times more than you would expect to pay or what you were led to believe.

Vitamins and Other Health Products: The sales pitch also may include a prize offer. This is to entice you to pay hundreds of dollars for products that are worth very little.

Investments: People lose millions of dollars each year in "get-rich-quick" schemes that promise high returns with little or no risk. These could include gemstones, rare coins, oil and gas leases, precious metals art and other "investment opportunities." These turn out to be worthless or worth much less than what you paid.

Charities: Con artists often label phone charities with names that sound like better known, reputable organizations. They won't send you written information or wait for you to check them out with watchdog groups.

Recovery Scams: Be careful if you buy into any of the above scams, because you are likely to be called again by someone promising to get your money back. Don't fall into this trap. Even law enforcement officials can't guarantee to recover your money.

What You Should Know
Many telemarketers are now required to register with the Office of Attorney General, and secure a $50,000 bond in the event consumers lose money because of the telemarketer's activities. In addition, people who illegally seek payment or purchases in exchange for a fraudulent investment scam, a promised prize or a sweepstakes entry can now be subject to criminal penalties, including time in jail. The same is true for people who charge a fee up front with the promise of helping someone to recover money lost in one of these schemes.

Telemarketers are required to maintain company-specific "Do-Not-Call" lists. When you receive a call from a telemarketer and you wish to be placed on its "Do-Not-Call" list, simply say so. It is illegal for a telemarketer to call if you have asked not to be called. Such businesses are also restricted to making calls between the hours of 8:00 a.m. and 9:00 p.m. Finally, if you decide to hang up on a pre-recorded call, you must be able to regain use of your own phone for outgoing calls within five seconds of the hang up.

Consumers can avoid some telemarketing solicitations by sending their name, telephone number (including area code) and address to the Telephone Preference Service, Direct Marketing Association, P.O. Box 9014, Farmington, New York 11735-9014. Registration should reduce the number of unsolicited calls placed to your home or business, but it may not stop all calls. The Association supplies its "Do-Not-Call" lists to its members on a periodic basis.

Although calls from tax-exempt organizations, including political parties, are generally exempt from these requirements, you should be warned that for-profit telemarketers often make calls under contract for tax-exempt charities.

Unsolicited fax advertisements are prohibited and all faxes must clearly identify the sender's name and the sending facsimile telephone number.

All pre-recorded calls (made using automatic dialers) must identify the caller, including the caller's telephone number and address. Telemarketers must tell you it's a sales call, the name of the seller and what they are selling before they make their pitch.

Before you pay, telemarketers must tell you the total cost of the goods and any restrictions on getting them or using them, or that a sale is final or non-refundable. In a prize promotion they must tell you the odds of winning, that no purchase or payment is necessary to win and any restrictions or conditions of receiving the prize.

It is illegal for telemarketers to misrepresent any facts about their goods or services' earning potential, profitability, risk, or liquidity of an investment; the nature of the prize in a prize-promotion scheme; or any other information.

It is illegal for a telemarketer to withdraw money from your checking account without your expressed, verifiable authorization. Telemarketers cannot lie to get you to pay, no matter what payment method you use. You do not have to pay for credit repair, recovery room, or advance-fee loan/credit services until these services have been delivered.

It is illegal to help deceptive telemarketers if a person knows - - or consciously avoids knowing - - that he or she is breaking the law.

Suspected violations of the telemarketing laws should be reported to the Pennsylvania Office of Attorney General, Bureau of Criminal Investigation at the following numbers:

Eastern (610) 631-5970
Central (717) 787-6858
Western (412) 832-5418