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Reloading and Double- Scamming Frauds
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Facts for Consumers from the Federal Trade Commission
Telemarketing: Reloading & Double-Scamming Frauds -- March 1994
Prepared in cooperation with Call For Action, Inc., a Washington,
D.C.-based international network of radio and television consumer
hotlines
If you've taken the bait and lost money to a telemarketer, expect
that the same or another telemarketer will try to hook you again.
Consumers who have been victimized often are placed on what is
known in the trade as "sucker lists" and then victimized again.
"Sucker lists" contain the names, addresses, phone numbers, and
sometimes other information of people who have responded to bogus
telephone solicitations. These lists, which are created, bought,
and sold by some telemarketers, are invaluable because
unscrupulous promoters know that consumers who have been tricked
once are vulnerable to additional scams. These telemarketers
hope that consumers believe that "this time" they will win the
"grand prize." Most often, however, these consumers simply lose
more money.
The Federal Trade Commission (FTC) is investigating complaints
about some telemarketing firms that take your money, not just
once, but repeatedly. Such activity is known as "reloading" or
"double-scamming."
This brochure explains how reloading scams work, what precautions
you can take to avoid becoming a victim, and where to go if you
have a complaint about a telemarketer.
How the Scam Works
"Reloaders" or "double-scammers" use a variety of approaches to
retarget consumers. For example, if you have lost money to a
telemarketer you may be contacted by an individual claiming to
represent a government agency, private company, or consumer
organization that works, for a fee, to recover lost money or a
product or prize. The problem is that the second caller may be
just as bogus as the first. And, if you've paid the recovery fee
-- you guessed it -- you've been double-scammed. In some
instances, the second caller works for the firm that took your
money in the first place.
Understand that some local government agencies and consumer
organizations do provide assistance to consumers who have lost
money. But they will not guarantee to get back your money and
they will not charge a fee.
In another approach, a telemarketer may use prize incentives to
persuade you to purchase merchandise. If you buy, you may get a
call back saying that you now qualify for a more valuable prize.
They lead you to believe that making an additional purchase could
increase your chances of winning. If you buy a second time, the
telemarketer may contact you yet a third time, repeating the same
salespitch. The only change is that you are now a "grand prize"
finalist and, by buying more merchandise you could win the "grand
prize."
Of course the telemarketer wants payment when you agree to the
purchase usually by a credit card phone order or the delivery of
a check by courier service. However, it may be several weeks or
more before you get your products and prizes. When your
merchandise or prizes do arrive, you may discover that you paid
too much for inferior products and that you did not win the
"grand prize" after all. By that time your credit card account
has been charged and your checks cashed.
How to Protect Yourself
To avoid being victimized by a reloading operation, consider the
following precautions.
l Beware of individuals claiming to represent companies,
consumer organizations, or government agencies that will recover
your lost money for a fee. National, state, and local consumer
enforcement agencies, such as your Attorney General and consumer
protection offices and non-profit organizations, such as Call For
Action, or the National Fraud Information Center, do not charge
for their services.
l Before you make a purchase by phone from a company you do
not know, ask the company to send you written materials about its
operation. You may be on a "sucker list." Even if you don't get
information, you can still check out the organization with your
state or local consumer protection office before you send any
money.
l Be skeptical of promoters who repeatedly contact you,
stating that if you purchase more of their merchandise, you have
a better chance of winning valuable prizes.
l Make sure you receive and inspect your original purchase or
prize before making additional purchases.
If You Have a Complaint
Always try to resolve complaints with the company first, but be
careful. Don't let the company representative persuade you to
accept a substitute product or award if this truly isn't what you
want. If you want your money back, say so and don't accept less.
If that does not work and you believe you have been defrauded,
contact the National Fraud Information Center at 1-800-876-7060,
9 a.m. - 5:30 p.m. EST, Monday - Friday; Call For Action (CFA) at
(202) 537-0585; TDD (202) 537-1551; your state Attorney General;
local consumer protection office; and Better Business Bureau, to
report the company.
The National Fraud Information Center is a private, non-profit
organization that operates a consumer assistance hotline to
provide services and assistance in filing complaints. Call For
Action (CFA) is a Washington, D.C.-based international network of
radio and television consumer hotlines. The CFA Network of 800
volunteers helps consumers retrieve money or services.
In addition, you may wish to file a complaint with the FTC by
writing to: Correspondence Branch, Federal Trade Commission,
Washington, D.C. 20580. Although the FTC generally does not
intervene in individual disputes, the information you provide may
help to indicate a pattern of possible law violations requiring
action by the Commission.
For More Information
The FTC has a series of Facts for Consumers that explain
fraudulent sales practices and precautions you can take to avoid
becoming a victim. Titles include:
Swindlers are Calling
Telemarketing Fraud
Telephone Investment Fraud
Prize Offers
These and other brochures are listed in the FTC's Best Sellers
for Consumers. To obtain a free copy, contact: Public Reference,
Federal Trade Commission, Washington, D.C. 20580; (202) 326-2222.
TDD (202) 326-2502.
(Downloaded from CompuServe's Consumer Forum (go SAVE) )
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