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FTC’s Operation Tele-PHONEY: corny name, but serious business

Jeremy Simon

The Federal Trade Commission has had enough of telemarketing fraud, deciding the combination of a corny name and serious action is required.

In its biggest sweep ever targeting telemarketing fraud, the FTC announced “Operation Tele-PHONEY,” a partnership with more than 30 international, federal, state and local law enforcement agencies. According to a Web cast and press release issued today, the FTC has filed federal district court complaints against “13 allegedly deceptive telemarketing operations.” The FTC estimates that the law enforcement actions will save consumers around $30 million over the next year.

(As for the operation’s name, I’m guessing it’s a play on the term “Internet telephony,” which refers to voice communication over the Internet — although knowing this reference doesn’t make it particularly clever.)

“Combined with the actions brought by other enforcement agencies, the sweep encompasses more than 180 cases that include both civil and criminal actions in the U.S. and Canada,” the press release says. Since the same fraudsters often pop up time and again to target consumers, putting the most successful scammers behind bars is the best solution.

The inclusion of Canadian authorities is an acknowledgement that fraudsters operate across our northern border. “Fraud does not respect borders,” Andrea Rosen of Canada’s Competition Bureau said during the announcement.

The FTC named the following telemarketers and fraudsters in its complaints: Med Provisions, Union Consumer Benefits, Steven Breitling/ICS Financial Firm, American Financial Card, Integrity Financial Enterprises, Financial Advisors & Associates, Handicapped & Disabled Workshops, Helping Hands of Hope, U.S. Magazine Services, Publishers Business Services, NHS Systems, City West Advantage, Inc. dba Unified Services and Direct Connection Consulting, Inc./Suretouch LLP.

Some of the scams involved credit cards. In certain cases, the telemarketers promised a credit card in exchange for payment of an upfront fee, but the card — if it came at all — was only good for buying merchandise from the telemarketer’s catalog. Other schemes charged unwanted fees or merchandise to consumers’ credit card or debit card accounts.

Additionally, since consumers can do more to protect themselves, the FTC announced a telemarketing fraud education campaign. Known as “Who’s Calling?”, the campaign urges consumers to recognize the signs of telemarketing fraud, to report fraud to the FTC and state attorneys’ general and to register phone numbers on the National Do Not Call (DNC) Registry to prevent unwanted telemarketing calls. You can watch the Commission’s educational videos on the Federal Trade Commission Web site as well as on the FTC’s YouTube channel.

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