Most consumers have received, at one time or another, an unsolicited call from some marketer selling products or services. For the purposes of this section, "telemarketing" means an unsolicited telephone call from a seller to a prospective buyer that is intended to close with a sale of goods or services to the prospective buyer.

For many people, "telemarketing" has become synonymous with "telemarketing fraud." Although a large number of legitimate businesses use telemarketing to promote and market their goods and services, you should be aware of telemarketing abuses and their warning signs. Telemarketing is most often abused in connection with prizes and sweepstakes giveaways, but telemarketing fraud takes many forms.

Example: Ms. Elder receives a phone call from Duke O'Fearl stating she has "just won" one of four prizes: 1) a 9" color TV, 2) a brand new Warp D 6000 automobile, 3) a $2000 "savings certificate," or 4) a Crayfish 8000 SuperMini computer. Ms. Elder suspiciously asks how much she has to pay to win her prize. Duke tells her that she need not pay anything but a "small shipping and handling fee" for sending her prize. Duke gets Ms. Elder's credit card number. Her next monthly statement shows a $36.95 fee from Excellent Jewelers. When Ms. Elder receives her prize, she finds that she won $2000 in coupons redeemable only for imitation jewels from the Excellent Jewelers' catalog.

Easy and open access to consumers makes it difficult to control telemarketing fraud. With a cheap commercial lease, a modest investment in furnishings, a phone system, and a crew of low wage workers armed with scripts, a telemarketer can reach all 50 states. Moreover, telemarketers not only buy, sell and trade phone lists, but use them to find out how recently individual consumers have received telemarketing calls. The small capital investment makes it easy for a telemarketer who is running a scam to shut down and move to a different state under a different name when law enforcement authorities take action. Law enforcement officials and legislatures are coordinating their efforts to control telemarketing practices, but consumers should still be very cautious of sales or investment opportunity "cold calls."

The Law

The Federal Trade Commission (FTC) has adopted strict rules that offer protection against telemarketing fraud. These rules require that certain information be given to consumers and prohibit telemarketers from engaging in certain actions.

A telemarketer may not call you if you have previously asked not to be called.
A telemarketer may only call between 8:00 a.m. and 9:00 p.m.
Before starting a sales pitch, the telemarketer must tell you that the call is a sales call, the name of the seller and what is being sold. If it is a prize promotion, the telemarketer must tell you that no purchase or payment is necessary to enter the contest or win the prize.
Telemarketers may not misrepresent any information. All facts must accurately represent the goods or services, investment opportunity or prize.
Before you pay for anything, the telemarketer must tell you the total cost of the goods, any restrictions on getting or using them, and whether the sale is final. In a prize promotion, you must be told the odds of winning and that no purchase or payment is necessary to win. The telemarketer must also inform you of any restrictions or conditions for receiving the prize.
It is illegal for a telemarketer to withdraw money from your checking account without your written, verifiable authorization.
A telemarketer cannot lie to get you to pay.

You can now register with a federal "no-call" list which will reduce the number of telephone solicitations you receive. You will need to register each phone number you have separately. Commercial telemarketers are prohibited from calling any registered no-call phone number. Many non-profit telemarketers are exempt, so you may still get these types of calls. The non-profit telemarketers are required to follow the FTC rules states above.

In addition, consumers have several other types of protection against telemarketing fraud, including law enforcement agencies which have joined together to combat it.

Example: This is a real-life example. In 1994, the New Hampshire Consumer Protection & Antitrust Bureau filed a suit against a so-called "recovery room" operating in Portsmouth. The business solicited amounts ranging from $300 to $500 from past victims of telemarketing fraud, claiming that it could recover the amount they had lost to earlier scams. Many of the targets were the telemarketing firm's "customers" from a few months prior when it was doing business under a different name in an adjoining state.

In addition, consumers have several other types of protection against telemarketing fraud, including law enforcement agencies which have joined together to combat it.

Because the elderly are targeted by telemarketers, there are stronger penalties for telemarketers who victimize older Americans. The Federal Bureau of Investigation (FBI), the US Justice Department and a number of states' Attorneys General have coordinated enforcement activities. State law enforcement officers now have the power to prosecute fraudulent telemarketers who operate across state lines.

The New Hampshire Legislature has passed a law strictly regulating prizes and sweepstakes promotions. (For more information, refer to Prizes and Sweepstakes)

It is illegal to help deceptive telemarketers if you know they are breaking the law.

Points To Remember

The following are tip offs that a telemarketing sales pitch or charitable solicitation may not be legitimate:
- High-pressure sales tactics
- Insistence on an immediate decision
- An offer that sounds too good to be true
- A request for your credit card number for purposes other than making a purchase, or for your savings or checking account numbers for any reason
- 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 can be a sign that the telemarketer wants to avoid inspection under federal mail fraud law)
- A statement that something is "free" followed by a requirement that you pay something like shipping and handling charges
- An investment that is "without risk"
- Unwillingness to provide references, such as a bank or names of satisfied customers in your area whom you can contact
- A suggestion that you should make a purchase or investment on the basis of "trust."
- When you place an order over the phone, always keep a record of the name, address and telephone number of the company, the goods or services ordered, date of order, amount paid (including shipping costs) and method of payment.
- Keep a record of any promised delivery date.
- Remember, you can tell a company not to call you any more. The company must then refrain from contacting you in the future.
- A telemarketer must disconnect your line from a prerecorded machine-delivered message within five seconds after you hang up.
- Remember, you only have to pay for credit repair, recovery room, advance-fee loans, or credit services when you receive these services. (For more information, refer to Credit Repair)
- Telemarketers may not call before 8:00 a.m. or after 9:00 p.m. or send you unsolicited ads by fax.
- Only give your credit card number, checking account number, or other personal information to a telemarketer if you are familiar with the company or organization, and the information is necessary to make your purchase.

Where To Go If You Have A Problem

If you feel you have been a victim of telemarketing fraud, call the NH Consumer Protection & Antitrust Bureau. The Bureau can determine whether they or the Federal Trade Commission can help you:

NH Consumer Protection & Antitrust Bureau
33 Capital Street
Concord, NH 03301-6397
603-271-3641

The Federal Trade Commission also wants to know about telemarketing frauds:

Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580
1-877-FTC-HELP or 1-877-382-4357 (toll-free)
TDD: 1-202-326-2502

To reduce the number of telemarketing calls you receive, register with the Do Not Call Registry either online or by phone:

Do Not Call Registry
1-888-382-1222

If you made a telephone transaction in response to a postcard or other mailing, contact either the US Postal Inspection Service or Postal Crime Hotline:

Chief Postal Inspector
US Postal Service
475 L'Enfant Plaza, SW, Room 3100
Washington, DC 20260
1-202-268-4298 or -4299 or 1-888-877-7644 (toll-free)

Postal Crime Hotline
1-888-877-7644 (toll free)
(live coverage 11:00 a.m. to 3:00 p.m. Eastern time, Monday through Friday)
TTY: 1-866-644-8398
E-mail: hotline@uspsoig

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New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301
Telephone: 603-271-3658