Who's Calling? Telemarketing Fraud and the Elderly

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Who's Calling? Telemarketing Fraud and the Elderly

  1. 1. Who’s Calling? Telemarketing Fraud and the Elderly Kathleen Benway Federal Trade Commission National Consumer Law Center April 2009
  2. 2. Who is the FTC? Nation’s consumer protection agency Civil law enforcement authority Protects consumers against unfair, deceptive or fraudulent practices. Investigates and litigates, develops rules, and educates consumers and businesses. National Consumer Law Center April 2009
  3. 3. Some of the laws we enforce. Section 5 of the FTC Act (15 U.S.C. 45(a)) (Prohibits “unfair or deceptive acts or practices in or affecting commerce”) Certain trade regulation rules issued by the Commission, including: Telemarketing Sales Rule Do Not Call Registry Recently changed to address prerecorded messages National Consumer Law Center April 2009
  4. 4. FTC Fraud Survey Published in 2007 Available at ftc.gov/be/econrpt.shtm Interviewed 3,888 consumers 30.2 million consumers had been fraud victims 48.7 million incidents of fraud during one year National Consumer Law Center April 2009
  5. 5. Fraud Survey Results Seniors were less likely than younger consumers to be victims of fraud Prize promotion and unauthorized buying clubs were frauds most frequently reported by seniors memberships Highest reported fraud -- weight loss products, foreign lotteries and buyer’s clubs Fraud offers were pitched through print ads, internet, TV and radio, and telemarketers Minorities experienced most fraud National Consumer Law Center April 2009
  6. 6. Fraud Survey Results Telemarketers were the source of 29% of fraudulent transactions that involved a purchase Credit cards were the most commonly used method of payment for fraudulent transactions (37%), cash and checks (27%), and debit cards (10%) National Consumer Law Center April 2009
  7. 7. Operation Tele-Phoney Largest Sweep of telemarketing fraud ever coordinated by the FTC 180 actions involving 30 international, federal, state, and local law enforcement agencies, including 13 by the FTC FTC cases targeted deceptive telemarketing 519,000 consumers affected Consumer will save $30 million next year Criminal cases resulted in prison terms National Consumer Law Center April 2009
  8. 8. Handicapped & Disabled Workshops “Bag and Bulb” Scam was aimed at the elderly with false claims that the caller was disabled. Consumers inundated with telephone calls, products they never ordered, and demands for payment. Consumers’ credit cards and bank accounts were charged without authorization. Do Not Call requests were ignored. FTC sued under Section 5, the Telemarketing Sales Rule, and the Unordered Merchandise Statute. National Consumer Law Center April 2009
  9. 9. Handicapped & Disabled Workshops Complaint filed in U.S. District Court in Phoenix, AZ Two principals, general manager, and three corporations named. TRO, Asset freeze, appointment of a receiver, immediate access. Business permanently shut down the next day! National Consumer Law Center April 2009
  10. 10. Handicapped & Disabled Workshops How did the FTC assemble its case? Consumer Complaints– these were critical!! Civil Investigative Demands (CIDs) to telecos, credit card processors, and banks used by the targets Assistance from the Arizona Attorney General and the U.S. Postal Inspector National Consumer Law Center April 2009
  11. 11. Handicapped & Disabled Workshops National Consumer Law Center April 2009
  12. 12. Handicapped & Disabled Workshops Findings: Consumers defrauded of more than $14,000,000 over the past 3 years. Defendants admitted “handicapped and disabled” claims were lies Case closed Business has been shut down. Lifetime telemarketing ban against owner Assets seized National Consumer Law Center April 2009
  13. 13. How can I help? FTC’s Who’s Calling? campaign encourages consumers to: Recognize the signs of telemarketing fraud Report fraud to the FTC and state AGs Register phone numbers on the Do Not Call registry FTC’s Helping Older Consumers Avoid Charity Fraud Both available at ftc.gov/phonefraud National Consumer Law Center April 2009
  14. 14. How to File a Complaint To report fraud Online at FTC.gov or by phone at 1- 877-FTC-HELP To Report Do Not Call violations Online at donotcall.gov or by phone at 1-888-382-1222 For either complaint you’ll need Phone number or name of the company that called Date of the call National Consumer Law Center April 2009
  15. 15. QUESTIONS? National Consumer Law Center April 2009

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