Phone Fraud and Telemarketing Fraud

Phone and telemarketing fraud refers to any type of scheme in which a criminal communicates with a potential victim via the telephone. Because many reputable companies use telemarketing to conduct business, criminals often can effectively obtain a victim’s credit card information and then use the information to make unauthorized purchases.

Advanced-Fee Scam

A common type of telemarketing scam is called an advanced-fee scam. An advanced-fee scam occurs when a victim receives encouragement to advance large sums of money with the hope of receiving a large rate of return on those initial advancements. One notorious scam is the Nigerian letter scam in which the criminal lures the victim into giving out credit card information to help purchase travel tickets for a “Nigerian prince” to escape persecution and come to America. The scam promises to give a large percentage of the prince’s fortune to the victim in exchange for the travel help. The criminal uses the credit card information to make unauthorized purchases, and the victim never sees a dime.

Pyramid Schemes

Criminals also frequently use pyramid schemes over the phone. A pyramid scheme requires the victim to pay an initial sum of money in order to receive sums of money from a number of different people that will exponentially increase the initial investment. While those at the top of the scheme profit, those at the bottom who cannot find any followers will receive no such return.

Overpayment Schemes

Overpayment schemes involve a buyer writing a seller a check for more money than the seller is owed. The buyer then tells the seller that he or she accidentally overpaid and asks the seller to wire him or her the amount of money overpaid. Subsequently, the buyer’s check bounces, and the buyer profits on the seller’s wire transfer.

Telemarketing Schemes

Fraudulent telemarketers also pose as workers calling on behalf of charities. They ask for the victim to make a donation to the charity over the phone. The criminal then takes the credit card information and makes unauthorized purchases with it.