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Front Page » October 9, 2007 » Local News » Division of Consumer Protection issues statewide telemark...
Published 2,917 days ago

Division of Consumer Protection issues statewide telemarketing fraud warning

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The telephone is an increasingly important marketing tool for legitimate business and telemarketing in a growing industry in Utah.

But the telephone in the wrong hands is also becoming an effective tool to defraud innocent Carbon County residents, cautioned the Utah Division of Consumer Protection.

According to the state agency, the fraudulent schemes range from peddling water purifiers, vitamins, and make-up kits to stock investments and abusive 900 numbers, pointed out the consumer protection division.

According to the Alliance Against Fraud in Telemarketing, Americans lose an estimated $40 billion annually to related scams. Con artists and swindlers resort to the telephone more and more as a weapon to rob victims.

If a sales pitch sounds too good to be true, Carbon County consumers should hang up the telephone, stressed the state agency,

The Utah Telephone Fraud Protection Act requires telemarketing companies to obtain a minimum of $50,000 bond, certificate of deposit or letter of credit to help provide restitution for victims in the event fraud occurs.

The state statute also provides enforcement powers to the Division of Consumer Protection to administer the law.

The division has identified seven areas where fraud can occur and results in the most damage to consumers. The areas include:

•Free prize offers.

Consumers who receive phone calls indicating that they have won a free prize should be cautious.

Usually, there are conditions to securing those offers such as substantial handling fees, shipping charges, membership fees and/or the purchase of other merchandise.

Consumers should ask telephone solicitors what the prizes are worth. The prizes may be of little value.

A contest or an offer of a free prize or gift is generally a sales tactic. No one is in business to give things away, noted the consumer protection division.

People should look for strings attached to all offers.

Local residents may call the consumer protection division to verify current registration of companies .

•Charitable solicitations.

Telephone solicitation is one method used by charitable organizations to raise funds from consumers.

Unfortunately, fraudulent charitable operators may also consumers.

Utah law requires charities to inform donors if the organizations are registered with the state, what the permit number is and what percentage of donations will actually go to the cause.

When consumers make a donation, it is a good idea to pay by check.

People should make the check out to the organization, not the person collecting the donation.

Local residents should be cautious of organizations that pressure people to pledge money on the spot.

Residents should also be cautious of telemarketers who indicate that the organization will send a representative immediately to your home to pick up your donation. A legitimate charity will gladly accept a donation today, tomorrow, or a month from now.

•Travel offers. It can be quite tempting to purchase a bargain-priced travel package over the telephone, but be careful. Many of these scams operate by enticing people to join "vacation clubs" or offering consumers "free trips." Often the vacation club or free trip has many hidden costs or conditions attached. A bargain or free trip could end up costing a consumer a lot of money.

•Investment fraud. Many unsound investment opportunities are peddled over the telephone. Fraudulent sales pitches usually involve such statements as "you must act now," "there is no risk" or "this must be kept a secret." Promoters will often try to make a person feel guilty or silly for asking questions or exhibiting doubt. Stop and think before quickly turning money over to an investment promoter calling on the phone. Ask for written information. And, if undue or uncomfortable pressure is applied, or if other "warning flags" arise during the conversation, hang up.

•"900" numbers. When calling a "900" number, the caller is charged either a fee for the number of minutes they are on the phone or a flat fee for the entire call. These fees can add up rather quickly after a person has spent more than a few minutes on the telephone. Some services will keep the caller on the line for an extended length of time before the person gets all of the information they called for, making it a very expensive phone call. Find out the costs of the call before it is made and never call any "900" numbers that doesn't disclose the costs up front.

Recently, unscrupulous telemarketers began transferring calls made to toll-free "800" numbers over to "900" numbers. This improper practice makes it more important today than ever before to know who is being called. Callers should also listen carefully to any recorded information at the beginning of the call.

•Advance-fee loan scams: These scams often target people who are out of work or have poor credit ratings. Con artists promise "guaranteed" loans, no matter what a persons credit rating is, in exchange for an up-front processing or application fee. An applicant may wait weeks or months to find out credit has been denied and the processing fee is not, as promised, refunded. Or, the applicant may never hear from the company again, and may even find the company is withdrawing money from credit card or checking accounts using information that was disclosed over the phone.

•Credit repair schemes. If a person is having a problem getting credit, they may be tempted to listen to telephone solicitors who advertise quick and easy solutions to credit problems. Unfortunately, in many cases, these companies take a persons money and do little or nothing to improve their credit history. Credit repair companies cannot remove bad credit information from files. If there are genuine mistakes on a credit file, the person it reflects can remove it themselves, for free. Credit repair companies must be registered with the Division of Consumer Protection. Call the Division to verify their registration.

Although the Utah Telephone Fraud Prevention Act may help deter some fraudulent telemarketers, a persons best defense is themselves.

•Be wary of investing with a stranger over the telephone.

•Don't give in to high-pressure sales tactics.

•Ask the solicitor if you have the right to cancel your purchase after you order.

•Ask the solicitor for the name, address and telephone number of the company for whom they work.

•Call Consumer Protection to verify the information.

•Verify exactly what the solicitor is trying to sell.

•Get the solicitor to repeat anything that isn't clear.

•Be extremely cautious of giving your credit card number over the telephone.

For more information, please contact the Division of Consumer Protection, Heber M. Wells Building, Second Floor, 160 East 300 South, SM 146704, Salt Lake City, Utah 84114 or phone 801-530-6601 or 800-721-7233 in Utah.

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