Telemarketing: Is it Legitimate or a Fraud?BondBeebe
John Merchant, CPA, CFE
At some point, you have probably received a phone call from a telemarketer trying to convince you to take advantage of an exceptional deal or asking you to contribute to a worthwhile charity. Beware of such calls. Fraud in telemarketing has become so serious that the Federal Bureau of Investigation has posted warnings, describing some of the schemes and what you should do to protect yourself from them.
One of the popular scams is to call and inform you that you have won a prize or a free gift which you will receive as soon as you have submitted a check to cover postage and handling, or taxes, on the prize. Or, you may be informed that you may take advantage of an incredible opportunity simply by submitting an advance payment or giving the caller your credit card information. The prizes and opportunities, of course, never materialize after you have made payment.
Fraudulent telemarketing has also expanded into solicitations for charitable contributions. Beware of the solicitation for a charity that is unfamiliar to you. If the charity seems worthwhile as described by the caller, ask for some written information to be sent to you for you to read and consider. If the caller declines, stating that it is just too expensive to send out information, just hang up. That charity probably doesn’t exist.
Some solicitors will go so far as to offer to send a courier to your home to pick up your check, noting that they will perform this service for your convenience. While this may seem generous on their part, the FBI warns that they are probably attempting to get your money without leaving any trail that will allow you to trace them.
Finally, you should be aware that many telemarketers that solicit funds for charity receive a substantial portion (sometimes as much as 90%) of the money that they raise as a commission for their services. While this is not illegal, it should cause you to consider whether it makes more sense to simply send a check directly to any charity that you have deemed worthy of your contribution.
If you would like to read more about scams and how to avoid them, you can consult the FBI warnings at www.FBI.gov/scams.