Ring ... Ring ... This is a very important message about your current credit card accounts. This is your second and final notice to lower your credit card interest rate and payments. Press 1 now to find out the terms, conditions and associated changes before the next billing cycle. Again, this is your final notice as it relates to the financial stimulus. So press 1 now to take advantage of this today ...
Rachel and the robocallers are still at it -- pestering America with their automated messages. Still luring victims to spend hundreds or even thousands of dollars on credit card interest-rate reduction scams. Still giving away “free” home security systems that come with hefty monitoring fees.
Officials from the Federal Trade Commission say that, even though they’ve stopped billions of these phone calls, the agency still gets about 150,000 complaints a month at its Do Not Call Registry website.
According to Todd Kossow, assistant director of the FTC’s Midwest region, this is the bottom line: Unless you’ve given a company written permission to call you, robocallers are breaking the law by dialing your number -- and their sales pitches are likely to be scams.
“What you’re dealing with is a professional criminal,” Kossow said. “The folks who are engaged in these illegal practices can be very, very convincing. They craft the robocall itself to be very attractive to the particular types of consumers they’re targeting and then they train their telemarketers to tell consumers whatever they want to hear.’’
The FTC has brought more than 100 enforcement actions against robocallers. To date, 80 of the cases have been resolved, with the agency recovering more than $41 million in civil penalties and $33 million in compensation to victims.
Among the most annoying repeat offenders: Rachel of Cardholder Services. Versions of that automated recording are still being used by packs of telemarketing operations that pitch similar interest rate reduction schemes. Their "service" entails little or no action on behalf of the consumer. Some simply set up a three-way phone call with the consumer and credit card company to request a reduction -- something consumers can do themselves for free. The consumer pays for the service, even if the credit card company refuses to lower the interest rate. According to the FTC, its most recent “Rachel” case involved a company called A+ Financial Center that was charging consumers $495 to $1,595 for little or no service.
Like playing whack-a-mole
In January, the FTC shut down a major robocall operation targeting senior citizens. In this scam, automated messages inform consumers that a friend or relative has purchased free medical alert devices for them, but “John from the shipping department” needs their addresses to complete the transactions. The seniors are then switched to live telemarketers who sign them up for monitoring services -- at $34.95 a month.
“Many of the people they’re calling either already have a medical alert device or they’re in an assisted living facility so they don’t need a private medical alert system,’’ Kossow said. “The evidence in our case shows that the defendants often knew that they were dealing with somebody who didn’t understand the nature of the call, but they were still perfectly happy to take their money.’’
The FTC shut down 11 companies operating from Florida, but Kossow says others are still using the medical device scam.
He warns consumers that Caller ID is ineffective in screening robocalls because the scammers now use “spoofing” techniques -- false phone numbers and company names -- to hide their identities and locations.
“One thing that helped us in the case in Florida is we did have former employees of the telemarketing room come forward who were concerned about the nature of the calls,’’ Kossow said. “They were able to help us find who was responsible.’’
Kossow understands that consumers are frustrated by robocalls, but he urges them to continue to file complaints on the FTC website, documenting the names and phone numbers being used. That information helps investigators eventually track the violators.
“Calls did drop off for a while, but we are starting to get complaints again on Rachel,’’ Kossow said. “So that type of interest rate reduction call is back. Not at the levels we’d seen previously, but they are back.’’
The FTC's robocall challenge
Kati Daffan, an FTC staff attorney, said the agency encourages entrepreneurs to work on developing solutions to thwart the robocallers. That was the impetus for the agency's recent FTC Robocall Challenge, a contest that awarded $50,000 in prize money for the best solutions to block the calls. One of the winners has launched a free website called nomorobo.com that allows consumers with participating carriers to filter out unwanted calls.
While the FTC does not endorse consumer products, Daffan said the point of the challenge was to get more consumer products on the market.The contest attracted more than 700 entries; suggestions ranged from wishful thinking to complicated technical plans.
“This is a problem that people are very passionate about, and there’s a huge demand for a solution,’’ Daffan said.
Changing technology has made automated dialing quick and cheap, she said.
“The internet has converged with our telephone system and opened it up to all kinds of people who can place millions of calls for very little money. And they can do it from anywhere in the world. All they need is a computer with an internet connection,’’ Daffan said. “The result has been just a flood of what’s basically telephone spam.''
She points out that computer software is available to battle spam email and viruses.
“It’s always changing. It’s always getting more sophisticated,’’ Daffan said. “But in that space we have an arms race between the bad guys and people who are providing solutions.''
Just hang up
The Do Not Call Registry isn't an end-all for telemarketing calls. There are, for example, exemptions that allow for calls from charities and certain nonprofit organizations -- and also from businesses that consumers have approved. As Americans find out every election season, calls are also allowed from organizations engaged in political solicitations or surveys.
Daffan says signing up for the Do Not Call Registry usually cuts down on telemarketing calls, in general, because legitimate businesses generally follow the law and don’t call people on the list.
“Being on the list reduces the number of calls that you get,’’ she said. “Unfortunately, it doesn’t seem to have much of an impact on the really unscrupulous people who are just brazenly breaking the law by shooting out these robocalls from all over the world.”
Signing up for the registry is permanent, Daffan said. If you’re not sure that your landline and cell phone numbers are on the list, there's a verification option on the website.
When you get a call from Rachel or her ilk, the FTC’s advice is to hang up.
“Our general advice is don’t trust them, no matter what they say,’’ Daffan said. “And if they do claim to be from a bank or some other trusted institution, the safest thing to do is hang up the phone and get a number for the bank that you know you can trust. Call back and ask what’s going on.’’
Daffan warns that the messages can be incredibly deceptive.
“I’ve been working on this issue for years, but the other day I got a text message from a bank saying there was a problem with my card, and I almost found myself responding in the way they suggested. It’s amazing how tricky they are,’’ she said.
Coming up: Who falls victim and why? Some top scams St. Louisans should watch for.
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