Telemarketing Recovery Scams
Scam artists buy and sell "sucker lists" with the names
of people who have lost money in fraudulent promotions. These so called "recovery
room" operators may promise to recover the money you lost or the prize or merchandise
you never received—for a fee that they want you to pay in advance. That's against the
law. Under the Telemarketing Sales Rule, it is illegal for recovery room operators to
request or receive payment until seven business days after they deliver the recovered
money or other item to you. If a recovery operation asks you to pay up front, don't do
business with them! Report them to the National Fraud Information Center's (NFIC)
Telemarketing Fraud Hotline at 1-800-876-7060.
How the Scams Work
Consumers who have lost money through prize promotions, merchandise sales, and
charity drives often are placed on "sucker lists." These lists contain names,
addresses, phone numbers, and other information, such as how much money the consumer has
spent responding to telemarketing solicitations. "Sucker lists" are bought and
sold by unscrupulous promoters who know that consumers who have been deceived once are
vulnerable to additional scams.
When recovery room scam operators contact consumers who have lost money to a previous
telemarketing scam, they falsely promise that, for a fee or donation to a specified
charity, they will recover the lost money, or the prize or product never received. The
operators use a variety of misrepresentations to add credibility to their pitch. Some
claim to represent companies or government agencies. Some say they are holding money for
you. Others offer to file necessary complaint paperwork with government agencies on your
behalf. Still others claim they can get you placed at the top of a list for victim
reimbursement.
The Federal Trade Commission (FTC) repeatedly finds claims like these to be false.
Although some federal and local government agencies and consumer organizations provide
assistance to consumers who have lost money, they do not charge a fee, guarantee to get
back even a portion of your money, or give special preference to people who file formal
complaints. The fact is that many recovery room scam operators never file your complaint.
But they may charge exorbitant fees for providing addresses of pertinent government
agencies—addresses that nonprofit consumer protection agencies may offer free-of-charge
or at a low cost. It is very difficult to get your money back; the fraudulent telemarketer
who contacted you initially is not likely to have the money readily available or even
still be in business.
Protecting Yourself
To avoid losing money to a "recovery room" operator, take the following
precautions:
- Be skeptical of people who offer to recover money, merchandise, or prizes, especially
those who want their fee in advance. Under the FTC's Telemarketing Sales Rule, it is
illegal for a recovery room operator to request or receive payment until seven business
days after you receive the recovered money or other item.
- Beware of individuals claiming to represent companies, consumer organizations, or
government agencies that will recover your lost money, merchandise, or prizes for a fee or
donation to a special charity. National, state, and local consumer enforcement agencies
and nonprofit organizations do not charge for their services. These groups include your
state Attorney General (AG), local consumer protection office, and NFIC.
- Before you purchase any recovery services by phone, ask what specific services the
company provides and the cost of each service. Ask the company to send you written
materials about its operation. And, check out the company with local law enforcement and
consumer agencies. Ask if other consumers have registered complaints about the business.
- Don't give out your credit card or checking account numbers unless you have a
relationship with the business or know its reputation.
If You Have A Complaint
Contact your state AG, local consumer protection office, and the Better Business
Bureau to file a complaint. The Telemarketing Sales Rule gives state AGs the power to
prosecute fraudulent telemarketers who operate across state lines. You also may reach the National Fraud Information Center at 1-800-876-7060, 9
a.m. - 5:30 p.m. EST, Monday - Friday. The NFIC is a private nonprofit organization that
operates a consumer hotline to provide service and assistance in filing complaints. NFIC
helps the FTC and the state AGs by entering complaints into a computerized database to
help track and identify fraud operators. .
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