The telephone can be a useful marketing tool. It can also be an instrument of fraud.

A number of rules and regulations are designed to protect consumers against telephone fraud. The 1990 Legislature strengthened Utah's telemarketing law to allow fewer exemptions to registration requirements, says Gary R. Hansen, director of the Utah State Division of Consumer Protection. "This will allow us tighter control over the marketplace."Telemarketing is a growth industry that provides a number of jobs, and that's helpful in this time of recession, says Hansen. "We don't want to shut it down, but we do want to prevent abuses.

"Telemarketing fraud is an ever-present problem," he says, and he encourages consumers who receive suspicious telephone calls to contact his office (at P.O. Box 45802, Salt Lake City, UT 84115-0802; 530-6601).

The Alliance Against Fraud in Telemarketing, a national coalition designed to promote awareness and protection against marketing abuses, says there are things consumers can do to protect themselves.

Everyone who has a phone is a prospect, notes the alliance, "whether you become a victim is largely up to you."

Swindlers may be calling - be sure you have their number, as well.


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 multibillion dollar business that involves selling everything from bad or non-existent investments to the peddling of misrepresented products and services.

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, skilled swindlers have ready answers. That's why calls from persons or organizations that are unknown to you should be checked out before you actually buy or invest.

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, the magazines you read and whether you've bought by phone in the past.

Fraudulent sales callers are skilled liars and experts at verbal camouflage. Their success depends on it. The first words uttered by most victims of phone fraud are, "the caller sounded so believable . . . "

Perpetrators of phone fraud are extremely good at sounding as though they represent legitimate business. They offer investments, sell subscriptions, provide products for homes and offices. Never assume you'll "know a phone scam when you hear one."

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 swindlers express astonishment at how many are likely to part with savings they worked years to accumulate on the basis of little more than a 15-minute phone conversation.

The person who "initiates" the phone call may be you. It is not uncommon for phone crooks to use direct mailings and advertise in reputable publications to encourage prospects to make the initial contact.

Victims of phone fraud seldom get their money back - or, at best, not 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 what other people do when they get money: they spend it.


High-pressure sales tactics.

Insistence on an immediate decision.

The offer sounds too good to be true.A statement that something is "free," followed by a requirement that you pay for something else - such as shipping and handling.

An investment that's "without risk."

Unwillingness to provide written information or references (such as a bank or names of satisfied customers in your area) that you can contact.A suggestion that you should make a purchase or investment on the basis of "trust."


Don't allow yourself to be pushed into a hurried decision. Contrary to what you are told, the reality is that 99 percent of everything that's a good deal today will still be a good deal next week. And the other one percent isn't generally worth the risk you'd be taking to find out.

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 will not be a problem. Swindlers, however, may not have printed information or may not want to risk a run-in with legal authorities by putting fraudulent statements in writing and in the mail.

Don't make any investment or purchase you don't fully understand. 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.

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 so you can contact the agency. If the firm says it is not regulated by any agency, you may want to increase your caution accordingly.

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 is precisely what swindlers want you to assume. They know most people never bother to follow through.

If an investment or major purchase is involved, request that information also be sent to your accountant, financial adviser, 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.

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.

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.

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 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 bill you later but need your credit card number in the meantime, be cautious.

If necessary, hang up. If you're simply not interested, if you become subject to high-pressure sales tactics, if you can't obtain 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 goodbye.