Debt Management Telemarketers Settle FTC Charges
On June 15th, 2006 the FTC announced that a "credit counseling service and related companies and individuals have agreed to pay $926,754 in consumer redress and civil penalties to settle Federal Trade Commission charges that they made false claims about their debt management program and violated the FTC's Do Not Call Rule."
What is interesting about this fraud is that the "Credit Foundation of America, Inc. (CFA), and its associates sold debt management services nationwide through unsolicited, pre-recorded messages left on home telephones, falsely claiming that consumers were pre-approved for a program to consolidate their credit card debts to a single monthly payment at a much lower interest rate." (my emphasis) And obviously many consumers took the back and got caught in this advance fee scam, where you pay something for nothing.
What is the message for due diligence here? Well, I have been urging people to purchase answering machines as a protective measure against telemarketers. Ten or fifteen years ago, most of our social networks were small and we could count on answering the telephone machine as being response to a friend or at least an acquaintance. Now, the telephone network can be accessed by any clown, armed with a mental bludgeon to knock down your defences and steal your money
But even using an answering machine is not enough as the CFA example shows, they left pre-recorded messages -no doubt of good hope, and credit cheer.
I too have fallen for returning a 800 number call, when the correct badges of authority, as Cialdini calls them, are present. Recently, I was told "by my bank" that my debit card had been stolen and they were enquiring about some "bogus" charges. I immediately phoned the 800 number and gave out all sorts of private information to confirm it was really "my bank account". How did I know what number I was phoning, what foreign call centre, or cell phone I was going to end up being connected to?
So, how do you think that all this turned out?
Technorati Tags: credit counseling service, debt management program, debt management services, credit card debts, pre recorded messages, trade commission charges, ftc, consumers, pre approved, advance fee, answering machines, redress
Well, actually it turned out well, even if I was incredibly careless. The phone call was from my bank and there had been an attack on my account. But it was very careless, worse since my bank is 2 blocks away and I know a number of individuals there who could have easily assisted me with this fraud claim. Such is the power of the badges of authority - prompting quick action before thought.
Make no mistake about it -telemarketing fraud is no different than any other robbery. You lock your house, car, and have safety deposit box, so why don't you lock your telephone? Think before returning any telephone call.
Technorati Tags: credit counseling service, debt management program, debt management services, credit card debts, pre recorded messages, trade commission charges, ftc, consumers, pre approved, advance fee, answering machines, redress
