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SWINDLERS ARE CALLING

1 Most telephone sales calls are made by legitimate

businesses offering legitimate products or services.

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.

2 There is no way to positively determine whether a sales

call is on the up and up simply by talking with someone on

the phone.

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.

3 Phone swindlers are likely to know more about you than you

know about them.

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.

4 Fraudulent sales callers have one thing in common: They

are skilled liars and experts at verbal camouflage.

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..."

5 Perpetrators of phone fraud are extremely good at sounding

as though they represent legitimate businesses.

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.

6 The motto of phone swindlers is, "just give us a few good

'mooches,'" one of the terms they use to describe their

victims.

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.

7 The person who "initiates" the phone call may be you.

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.

8 Victims of phone fraud seldom get their money back -- or,

at best, no more than a few cents on the dollar.

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!

9 TIP-OFFS

That a Caller Could be a Crook

1 High-pressure sales tactics.

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."

2 Insistence on an immediate decision.

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.

3 The offer sounds too good to be true.

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.

4 A request for your credit card number for any purpose

other than to make a purchase.

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.

5 An offer to send someone to your home or office to pick up

the money, or some other method such as overnight mail to

get your funds more quickly.

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.

6 A statement that something is "free," followed by a

requirement that you pay for something.

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.

7 An investment that's "without risk."

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!

8 Unwillingness to provide written information or references

(such as a bank or names of satisfied customers in your

area) that you can contact.

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."

9 A suggestion that you should make a purchase or investment

on the basis of "trust."

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.

10 WAYS

To Avoid Becoming a Victim

1 Don't allow yourself to be pushed into a hurried decision.

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.

2 Always request written information, by mail, about the

product, service, investment or charity and about the

organization that's offering it.

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!

3 Don't make any investment or purchase you don't fully

understand.

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.

4 Ask what state or federal agencies the firm is regulated

by and/or is required to be registered with.

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.

5 Check out the company or organization.

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.

6 If an investment or major purchase is involved, request

that information also be sent to your accountant,

financial advisor, banker, or attorney for evaluation and

an opinion.

Swindlers don't want you to seek a second opinion. Their

reluctance or evasiveness could be your tip-off.

7 Ask what recourse you would have if you make a purchase

and aren't satisfied.

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.

8 Beware of testimonials that you may have no way of

checking out.

They may involve nothing more than someone being paid a

fee to speak well of a product or service.

9 Don't provide personal financial information over the

phone unless you are absolutely certain the caller has a

bona fide need to know.

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.

10 If necessary, hang up.

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.

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



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