The Federal Trade Commission this week announced that it has pulled the plug on a multi-million dollar cross-border telemarketing scam operation that can be traced back to 2009.
The FTC’s complaint against First Consumers, LLC, Standard American Marketing, Inc., and PowerPlay Industries LLC alleges that the companies used telemarketing boiler rooms in Canada to “cold call” tens and thousands of consumers claiming to sell fraud protection, legal protection, and pharmaceutical benefits services. These unsolicited services would often charge anywhere between $187 to $397. Between May 2011 and December 2013 the scheme brought in $20 million.
The defendants are said to have targeted senior citizens who were given false information and were compelled to reveal their bank account information. The scammers used scare tactics and sometimes even went so far as to impersonate bankers and government officials. The account information would then be used to create “remote checks” drawn on the consumers’ bank accounts. These remotely created checks were then deposited into a network of corporate accounts established in the United States. The U.S. based defendants then transferred money to the Canadian accounts.
The Internet has certainly become a haven for scam artists, but this case is a reminder that consumers need to be on guard for scammers contacting them via the “old-fashioned” telephone. In fact, according to Fraud.org’s 2013 Top Ten Scams report, the telephone was the most-frequent way that consumers reported being contacted by scammers in 2013.
Tips to avoid being a victim of telemarketing scams include:
- Never give out sensitive personal information such as Social Security Numbers, bank account numbers or credit/debit account numbers in response to an unsolicited telephone call.
- Telemarketing scammers will often try to pressure the person on the other end into making a quick decision. Remember, if it sounds like a good deal today, then you should be able to take the time to research it thoroughly.
- Be wary of any telemarketed who requests payment via wire transfer, cash or prepaid card.
- Information on spotting telemarketing scams targeting seniors is available at “They Can’t Hang Up,” a joint educational initiative between NCL and AARP.
- For more tips from Fraud.org on spotting telemarketing scams, click here.