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Telemarketing Scams: Forecasting Phone Fraud for the ’90s

January 26, 1990

WASHINGTON (AP) _ A group dedicated to fighting telemarketing fraud is urging victims of con artists to speak out and report them to the authorities.

″Please don’t suffer in silence,″ said Mike McCarey, of the Federal Trade Commission’s consumer protection bureau.

″Don’t be ashamed if you become a victim,″ said Linda F. Golodner, executive director of the National Consumers League. ″Report it to the authorities so something can be done to help the next person.″

They were among the speakers at a news conference in Washington Thursday sponsored by the Alliance Against Telemarketing Fraud.

The alliance, in announcing its predictions for the 10 most prevalent telemarketing scams this decade, warned that crooks and con artists are updating their scams for the 1990s.

The decade’s new con jobs include bogus offers that ″guarantee″ - for a hefty fee - to help sell that vacation timeshare unit you got stuck with in the 1980s.

In another, mortgage acceleration scalpers promise to ″help″ homeowners save money by paying off their loan obligations early but actually wind up costing them much more.

″With each change in technology, there’s a new twist,″ said Ms. Golodner of the National Consumers League, one of the 60 consumer groups, trade associations, government agencies, businesses and labor unions that form the alliance.

The Federal Trade Commission estimates that telemarketing fraud has cost consumers $1 billion a year for the last five years.

Kansas Securities Commissioner Doug Mays went even further.

″These people are crooks. Their weapons are telephones - not guns,″ he warned, adding ″If you own a telephone, then you are a potential victim for these people.″

The alliance’s watch list of schemes aimed at relieving U.S. consumers of their money includes ″abusive″ 1-900 long distance telephone numbers that charge the unwary several dollars per minute - often while they are kept on hold for information they could get for free.

″The industry is trying very hard to police our end of it, but we’re only one part of the equation,″ said Ken Griffin, a spokesman for American Telephone and Telegraph Co. He said AT&T screens potential 900-service customers for credit background and other routine information but not for how the phone link will be used.

Although there are numerous legitimate telemarketers, ″we want to warn consumers that con artists are making these types of offers through high- pressure sales pitches providing little concrete information,″ said Ms. Golodner.

Richard Barton of the Direct Marketing Association, a trade group of about 3,000 telemarketing companies, said, ″We believe very strongly as an industry that telefraud is very harmful to our businesses.″

Barton, who also attended the news conference, noted that his association maintains a code of ethics but ″an outright fraudulent organization is not going to pay attention to us anyway.″

All of the speakers urged consumers to avoid becoming victims by checking out offers that sound too good to be true, asking for explanations in writing, hanging up on high-pressure salespeople and taking their time before agreeing to buy.

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