The Federal Trade Commission accused 11 companies yesterday of “inbound telemarketing” fraud, or scams run through the use of call-in lines advertised through print direct-response advertisements.
Proclaiming that the sweep may be the “most far-reaching” against so-called inbound telemarketing fraud, the FTC said the goal of its campaign, dubbed “Operation Dialing for Deception,” was to warn consumers to be as careful when they call telemarketers as when telemarketers call them.
According to the FTC, the two most common types of inbound fraud are medical billing and advance-fee lending scams. The scams are typically propagated through newspaper classifieds, which attract many people seeking work, the FTC said.
The FTC worked with Canadian law enforcement and the Better Business Bureau to carry out the operation. Canadian authorities estimate that there are 300 to 500 boiler room operations in Canada that target U.S. consumers, according to the Better Business Bureau.
“The con artists have learned to go where the money is,” said Ken Hunter, president/CEO of the Council of Better Business Bureaus. “Telemarketing con artists in particular are able to take people's money with astonishing speed.”
In medical-billing scams, consumers are offered the opportunity to work at home processing medical billing claims for doctors' offices if they purchase a package, which includes lists of doctors supposedly seeking help with billing along with bill processing software, according to the FTC. The packages cost consumers between $300 and $500, but usually fail to live up to the promises made in the offer, the FTC said.
In advance-fee lending scams, consumers are offered credit cards and loans if they pay an upfront fee. Such offers are always illegal and should be avoided, the FTC said.
Four of the 11 companies involved in the cases announced by the FTC are charged with running advanced-fee lending scams, including: Credit Enhancement Services, Camden, NJ; The Woodway Group, Houston; Capital Choice Consumer Credit, Miami; and Universal Bancom, Chatsworth, CA.
Another five companies are charged with running medical-billing scams, including: Electronic Processing Services, Las Vegas; International Trader, Los Angeles; Medical-Billing.com, Carrollton, TX; Electronic Medical Billing, Mission Viejo, CA; and PHD Billing, Burbank, CA.
In addition, True Techniques and Absolute Mailers, San Antonio, is charged with fraudulently marketing an at-home envelope stuffing business opportunity. Affiliated Vendors Association, Grand Prairie, TX, is charged with running a sham business-watchdog organization that gave consumers glowing reports about vending machine sellers who paid the company.
The FTC has settled the charges in only one case, Universal Bancom, which agreed to a ban from the sale or marketing of merchant credit cards.