Federal Trade Commission n Bureau of Consumer Protection n Office of Consumer and Business Education

Consumer Alert

Putting Cold Calls on Ice

While many telephone sales calls are made on behalf of legitimate organizations offering bona fide

products and services, some unsolicited phone sales calls can be frauds. Thats why the Federal Trade

Commission encourages you to be skeptical when you get a cold call.

Fraudulent telemarketers may get your phone number from a telephone directory, mailing list, or

sucker list, a directory of consumers who have already lost money to fraudulent prize promotions or

merchandise sales. Sucker lists include names, addresses, phone numbers  even how much money you

may have spent on telemarketing scams. Unscrupulous promoters buy and sell sucker lists on the theory

that consumers who have been deceived once are easy prey for additional scams.

The FTCs Telemarketing Sales Rule helps protect you from abusive and deceptive telephone sales

practices. The Rule restricts calling times to the hours between 8 a.m. and 9 p.m., and puts other limits

on telemarketers, too. For example:

 Telemarketers must tell you its a sales call, the name of the seller, and what theyre selling before

they make their pitch. If theyre pitching a prize promotion, they must tell you that no purchase or

payment is necessary to enter or win.

 Its illegal for telemarketers to lie about their goods or services; earnings potential, profitability,

risk, or liquidity of an investment; or the nature of a prize in a prize-promotion scheme.

 Before you pay, telemarketers must tell you the total cost of the goods theyre selling; any restrictions on getting or using them; and if a sale is final or non-refundable. In a prize promotion, they

must tell you the odds of winning, that no purchase or payment is necessary to win, and any restrictions or conditions of receiving the prize.

 Its illegal for a telemarketer to withdraw money from your checking account without your express,

verifiable authorization.

 Telemarketers cannot lie to get you to pay, no matter what method of payment you use.

 You do not have to pay for credit repair, recovery room, or advance-fee loan or credit services until

these services have been delivered.

 Its illegal for a telemarketer to call you if you have asked not to be called.

You may not be able to put a freeze on cold calls, but you can learn how to spot those that spell

 f-r-a-u-d. Heres how:

 Say no to high pressure sales tactics. Legitimate businesses respect the fact that youre not interested.

 Tell callers if you dont want to hear from them again. If they call back, theyre breaking the law.

You can feel comfortable hanging up.
 Take your time when youre presented with a sales opportunity. Ask for written information about

the product, service, investment opportunity, or charity thats being pitched. Dont talk with a

salesperson if its not convenient for you. A reputable salesperson should be willing to call you back

at a time you choose.

 Talk to a friend, relative, or financial advisor before you respond to a cold call. Any investment you

make may have serious financial consequences for you  and the people you care about.

 Hang up if youre asked to pay for a prize. Free is free.

 Dont send money  cash, check, or money order  by courier, overnight delivery, or wire to

anyone who insists on immediate payment.

 Keep information about your bank accounts and credit cards to yourself  unless you know who

youre dealing with.

 Hang up if a telemarketer calls before 8 a.m. or after 9 p.m. Thats a tip off to a rip off.

 Check out the company with your state and local consumer protection office before you buy any

product or service, or donate money.

 If you suspect a scam, call your state Attorney General.

For more information about telemarketing fraud, contact: Consumer Response Center, Federal Trade

Commission, Washington, D.C. 20580; 202-FTC-HELP (382-4357). TDD: 202-326-2502. You also

may visit the FTC at www.ftc.gov on the Internet.

August 1998