Boom to Doom?
Con Artists Pitch Financial Dreams but Sell Nightmares

NCL Releases Top Ten Telemarketing Scams of 1997

      WASHINGTON, D.C....APRIL 28...Despite the booming economy, the most popular pitches by telemarketing con artists are about ways to earn, win or borrow money, according to the National Consumers League's National Fraud Information Center. Sweepstakes, advance-fee loans, and work-at-home plans top the list of top telemarketing frauds released today.

      "These con artists are promising a pot of gold at the end of the rainbow, but all they deliver is disappointment," stated National Consumers League President Linda F. Golodner.

      Six of the top ten scams involve winning, earning or borrowing money: sweepstakes/prizes; advance-fee loans; work-at-home plans; credit card offers; lotteries; business opportunities/franchises. In three of those categories, sweepstakes, advance-fee loans, and lotteries, a significant number of the fraudulent telemarketers targeting consumers in the United States were operating from outside the country. Twenty-one percent of sweepstakes and prize offers, seventy-one percent of advance-fee loan scams, and fifty percent of lottery solicitations came from Canada or other countries.

      Federal law prohibits up-front fees for certain types of telemarketing offers, including loans. It is illegal to request payment in order for consumers to claim sweepstakes and prizes or to transmit lottery information across state or national boundaries. "Con artists know that it's harder for U.S. law enforcement agencies to go after them if they are located beyond our borders," explained Susan Grant, NCL Vice President and National Fraud Information Center director.

      To avoid being scammed, NCL offers this advice:

• Don't act on impulse or because of pressure. Ask for written information, then check it out with local or state consumer agency and Better Business Bureau. Legitimate telemarketers won't pressure you to "act now."

• Never pay to get a free prize. Legitimate prize and sweepstakes promoters don't ask for money to claim your award or to improve your chances of winning.

• Don't fall for phony credit offers. If you have bad credit, no legitimate telemarketer will promise you a loan or credit card.

• Don't believe unrealistic claims. Ask yourself if promises of cheap travel or huge profits from business ventures are realistic. If they're not, say "no thanks."

1. Prizes/Sweepstakes
   phony prize awards that require payment of fees first -- and never materialize
2. Advance Fee Loans
   empty promises of personal or business loans, often targeted to people with financial problems, requiring payment of fees in advance
3. Work-at-Home Plans kits sold to stuff envelopes, fabricate jewelry, or perform other work-at-home for which false promises of profits are made
4. Pay-Per-Call Services
   cost of calls to access information or entertainment services through 900 numbers, 800 numbers or international phone numbers are not adequately or accurately disclosed
5. Slamming
   consumers are tricked into switching their phone service to another carrier without their knowledge or consent
6. Magazine Sales
   telemarketers falsely represent that they are calling on behalf of the publisher to renew the consumer's subscription and never deliver the magazines, or misrepresent the total cost
7. Credit Card Offers
   phony promises of credit cards, often targeting people with poor credit histories, requiring payment of fees in advance
8. Lotteries
   illegal promotions for foreign lotteries or for lottery clubs that supposedly improve chances of winning
9. Business Opportunity/Franchises
   exaggerated claims for amount of potential profits through investments in prepackaged businesses or franchises
10. Travel/Vacations
    offers of free trips or discount travel that never materialize

For the full report, click here.

Founded in 1899, NCL is the nation's pioneer consumer group which works to bring consumer power to bear on marketplace and workplace issues. NCL worked for child labor provisions in the Fair Labor Standards Act (passed in 1938) and more recently, has helped organize the Child Labor Coalition (CLC) which is committed to ending child labor exploitation in the U.S. and abroad.