*Postcard Targets Telemarketing Fraud

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A team of associations and government agencies led by the U.S. Postal Inspection Service is sending a postcard to every household in America next week instructing consumers how to protect themselves against telemarketing fraud. It is the largest consumer protection mailing in the country's history.


The postcard, "Project Know Fraud," is drawing mixed reaction from the telemarketing industry, though it received the blessing of the Direct Marketing Association, which was given an opportunity to review an early draft.


While some telemarketers shrugged it off, many expressed concerns that heightened attention will make consumers more hesitant when contacted for legitimate offers.


The mailing, which will be sent to 118,789,007 addresses, was first mentioned by President Clinton in his radio address Nov. 6 and will be formally announced on Wednesday. The project involves the Council of Better Business Bureaus, the Federal Trade Commission, the Department of Justice, the FBI, the American Association of Retired Persons, the Securities and Exchange Commission and the National Association of Attorneys General. The campaign includes a toll-free anti-telemarketing fraud hotline and several pages of information on the government's www.consumer.gov Web site.


The postcard lists tips to recognize the difference between legitimate telephone offers and fraudulent ones and warns consumers to beware of callers who employ tactics, such as asking consumers to wire money or asking them to act right away. The front of the card features a suspicious looking man wearing a telephone headset along with the words, "Warning. Don't be his next victim." On the flip side, an elderly woman is pictured answering a phone under the heading, "Fraudulent telemarketers: They've got your number … now they want your money."


The line that telemarketers have found most disturbing is one of the precautions to prevent fraud: "Never give your credit card, checking account or Social Security number to an unknown caller." As credit cards can be among the safer ways to process transactions over the phone, some contend that instructing consumers not to divulge that information could hinder legitimate efforts.


"Obviously if I'm calling from a call center, I'm unknown," said Tanya Bartsch, telemarketing manager with International Masters Publishers Inc., Stamford, CT, which sells continuity card sets, such as recipe cards, over the phone. "If you tell me don't talk to strangers on the street, I won't talk to any strangers."


"I'm 99 percent unconcerned about this," added Gordon McKenna, chairman of Arlington, TX, teleservices agency Telequest, who noted that several clients request that credit card numbers be obtained from customers. "Many fraudulent telemarketers do not ask for credit cards because they can't get them processed."


McKenna, the American Teleservices Association's new board president, said that to his knowledge the ATA was not contacted for input on the campaign.


While everyone in the industry was in support of efforts to fight fraud, reactions to the concept of the campaign varied.


"It's too much, too late. A postcard is not the appropriate avenue for handling this," said Tim Searcy, president of Optima Direct, Vienna, VA, who noted that legitimate players in the industry have been very cooperative in working with attorneys general on fighting fraud.


He also expressed concern that the industry was being unfairly singled out, as a campaign of this scale has never been launched to weed out fraud in other industries.


International Masters Publishers has already made arrangements with its agencies to suspend outbound calling for a few days if complaints rise sharply, Bartsch said. The company also added a passage to its telemarketing scripts informing consumers that the company is aware of the postcard and assuring them that its operations are legitimate. Consumers will be provided with a number to call back if that would help reassure them of the company's credibility.


"Telemarketing already has a bad reputation. There is a basic mistrust that keeps people from taking calls," she said.


Others were less concerned.


"I'd be a little wary of its effect on the legitimate industry - but, overall, I think it will be more positive than negative," said Gail Stone, president of PTM Communications, a New York consulting firm. "A lot of people get hurt from that kind of fraud, particularly senior citizens. It's a black stamp on the industry, and people should be informed."


The campaign is being paid for with money recovered from convicted fraudulent telemarketers, said Bob Kuykendall, postal inspector and fraud program manager. The money results from a case in which a company offered preapproved credit cards to consumers. In the scam, consumers received a postcard in the mail instructing them to call a 900-number to receive their cards. The cards never arrived, and consumers racked up $20 to $25 phone bills in the process.


Because it would have been impossible to return the money to the victims, the judge in the case ordered the $4 million that was recovered to be put in an account for consumer education on telemarketing scams. This campaign depletes most of the account, Kuykendall said.


The only consumer mailing that has been comparable in scale was a mailing in the 1980s warning consumers about AIDS.
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