Consumer
Fraud By Phone or Mail
A warning from the United States Postal Inspection Service
Congressional & Public Affairs Branch, 475 L'enfant Plaza, SW
Washington, D.C. 20260-2160 USA
DON'T
TAKE THE BAIT
When phone calls and postcards are bringing you marvelous
offers to buy:
--Vitamins
--Low-cost vacations
--Office supplies or
promotional items
--Club memberships
--Sure-fire investments
Do they say:
--"You've just won a contest, and if you pay 'shipping and
handling' or a small gift tax,' it's all yours."?
Do they want:
--Your credit card number?
If so, you may be the victim of a BOILER ROOM
FRAUD.
DIRECT MARKETING VS BOILER ROOM FRAUD
Direct marketing is the sale of goods and services by direct contact
with the consumer by
telephone or mail.
Boiler room fraud costs consumers nearly a billion
dollars a year. Boiler room fraud is the use of the phone or the mail by unethical
companies who only want to take your money. It is a growing problem for both individuals
and businesses. The best way to protect yourself is to learn to recognize the
warning signs.
WHO ARE THE BOILER ROOM COMPANIES?
--Most
calls come from firms located out-of-state. The firms work out of large rooms
with rows of phones staffed by solicitors trained to repeat a deceptive sales
pitch.
--Sometimes these firms send you an enticing or official-looking letter
or postcard in the mail urging you to call them.
--Sometimes 900 numbers are used so you'll be billed just for
calling them, even if you decide not to purchase anything.
WHAT DO THE SALESPEOPLE SAY?
Here
are some common phrases:
--"You've been specially selected to hear this
offer."
--"You'll get a wonderful free bonus if you buy our product."
--"You've won a valuable free prize."
--"This investment is
low-risk and provides a higher return than you can get anywhere else."
--"You have to make up your mind right away."
--"You can just put the shipping and handling charge on your
credit card."
The callers use well-rehearsed sales pitches designed to sound believable. You
may be transferring from person to person, so it sounds like a genuine business
setting. A "vice-president" may even call you back to try to convince
you to buy. Beware of high pressure pitches that require decisions right now!
Legitimate firms will always give you time to think it over.
WHAT
IF YOU FALL FOR THE BOILER ROOM PITCH?
If you are the victim of a
Boiler Room Fraud, you may later find:
--The merchandise you bought is
overpriced and poor quality.
--The "free gift" never arrives, or
it's worth just a fraction of the "shipping and handling" or "gift
tax" you paid.
--The investment turns out to be non-existent, or a loser.
--The donation you thought was going to charity goes into the fund-raisers pocket.
--Unauthorized charges start appearing on your credit card bills.
--900 number
telephone charges are much higher than you expected.
HOW CAN YOU PROTECT
YOURSELF?
--Take your time.
--Don't buy something merely because
you'll get a "free gift."
--Get all information in writing before
you agree to buy.
--Check out the caller's record with the Attorney General's Office
and the Better Business Bureau.
--Don't give your credit card number or checking account number
to anyone who calls on the phone or sends you a postcard.
--Check out a charity before you give. Ask a charity how much
of your donation actually goes to the charity.
--be extremely cautious about investing with an unknown caller
who insists you must make up your mind immediately.
--If the investment is a security, check with state officials to see if
it
is properly registered. If large amounts of money are involved, check with your
legal or financial advisor.
--Don't send money by messenger or overnight mail.
If you use money rather than a credit card in the transaction, you may lose your
right to dispute fraudulent charges.
--Hang up instead of being pressured
to buy.
--If it sounds too good to be true, it probably is.
--make sure
you know the per minute charge for any 900 number call you make.
DON'T
TAKE THE BAIT!
Ask yourself these questions:
--Do I have
adequate TIME TO THINK THIS OVER, or am I being pressured for a decision right
now?
--Will they send me ADDITIONAL INFORMATION through the mail, putting
their statements and promises in writing, or do they refuse?
--Are they insisting
on my CREDIT CARD OR CHECKING ACCOUNT NUMBER right now?
--Do they want to
SEND OVER A PRIVATE COURIER tonight for my check?
--Is my "free gift
or prize" really free, or DO I HAVE TO PAY A
REGISTRATION FEE OR SHIPPING
AND HANDLING CHARGE before receiving anything?
If the answer to any one
of these question is yes...BEWARE! Take time to consider the offer, get additional
information and advice, and resist the "take it or leave it" high pressure
tactics so often used by boiler room pitches. See below for agencies which can
provide additional information.
For more helpful information about the
firm or offer you are considering, contact any of the following, preferably in
the city or state where the firm is located:
State and
Local Consumer Protection Agencies
Better Business Bureau
State Attorney
General
Chamber of Commerce
State Securities Regulator
Federal Trade
Commission
Federal Bureau of Investigation
The U.S. Postal Inspection
Service
If you think you are the victim of a boiler room fraud,
save all
documentation of the transaction, including postcards, canceled
checks, telephone bills, credit card statements and mailing envelopes. Make detailed
notes of your telephone conversations by date and time, and write down the important
statements made by each individual who spoke with you.
If any part of
your transaction took place through the U.S. Mail, including the receipt of promotional
literature or the mailing of payment, we urge you to contact the nearest postal
inspector's address, or write directly to:
The Chief Postal Inspector
475 L'enfant Plaza SW
Washington, D.C. 20260-2160
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