Preventing telemarketing fraud with an RSVP call center
Abstract
Every year Americans lose over 40 billion dollars in telemarketing, investment, and charity fraud. Research shows that vulnerable seniors are less likely to fall prey to telemarketing scams when educated by peer mentors. An RSVP program in Los Angeles, California uses telephone solicitation to educate older consumers about what they can do to protect themselves from fraudulent practices. This program was highlighted in the August 2005 issue of the National Service News, published by the Corporation for National and Community Service.Issue
Educating at-risk seniors about the perils of fraudulent telemarketing and other financial scams.Action
Modeled on a "boiler room" where criminals gather to prey on their victims through telephone solicitations, the Telemarketing Victim Call Center (TVCC) reverses the criminal process with the following effective practices:
Using lists of victims' names that have been found in telemarketing fraud investigations, the RSVP volunteers:
- Call potential victims who have been identified as targets of boiler room operations, following a one-page script that is designed to engage and educate victims.
- Warn potential victims regarding the risks associated with sending money or giving personal or financial information to anyone they do not know personally.
- Advise potential victims about warning signs of fraud, such as being pressured to wire money, or of offers to have a courier pick up a check or money order.
- Offer a fraud prevention kit.
- Provide fraud prevention resources, including the telephone numbers of the National Fraud Information Center and the local telephone number of the nearest FBI office.
Context
"Boiler room" operations typically consist of a room full of slick, professional-sounding salespeople on the phone harassing potential investors to make investments using the same rehearsed script. Because sales representatives "cook up" their ingredients (sales pitches), inflamed by hot air to make things sound better than they are, this type of scam has earned the name "boiler room". After having duped the first investor, boiler room operators attempt to trap more victims. [Source: The Electronic Investor Resources Centre]
According to Anthony R. Pratkanis, in a July 2005 testimony to the United States Senate Special Committee on Aging, every year Americans lose over 40 billion dollars in telemarketing, investment, and charity fraud. Many fraudulent financial schemes, such as those using telemarketing, the Internet, and investment seminars, specifically target the elderly because they have financial resources and respond in a friendly, polite manner. Not all older victims are isolated or lonely however, many are active people who are lured by great-sounding deals.
The Telemarketing Victim Call Center is an innovative program that represents a partnership with senior RSVP volunteers, law enforcement, AARP and WISE Senior Services. Each week, volunteers gather to contact known victims of telemarketing fraud, to present a message about prevention, to educate victims about the signs of illegal telemarketing fraud, and to gather information for law enforcement.
Outcome
Besides providing resources and peer counseling to the elderly victims of telemarketing fraud, RSVP volunteers also collect information for law enforcement. The volunteers ask about current solicitations and enter pertinent information on suspicious activity forms. They then forward this information to the FBI where it is entered into a national database.
As the volunteers' skills have increased, they have taken on more advanced interventions. Messages have been tested for effectiveness at influencing victims' to be more alert regarding telephone solicitations that may be scams. A grant from the US Department of Justice funded the research, which revealed that using peer mentors to deliver prevention messages was an effective strategy in reducing victimization for older consumers.
In the spring of 2005, The National Association of Securities Dealers (NASD) Investor Education Foundation awarded $127,700 to WISE Senior Services to conduct a national research project to explore why the elderly are the more frequently victimized by financial fraud crimes and to develop strategies to help them.
Over an 18-month period, the project, Off the Hook Again: Understanding Why the Elderly Are Victimized by Economic Fraud Crimes, will examine the susceptibility of the elderly to fraudulent solicitations and their level of financial literacy. Researchers will conduct four major surveys and a series of five to eight focus groups. They will use their findings to create new tools and develop practical messages to increase fraud awareness among seniors.
Evidence
Since its inception in 1998, the TVCC has provided outreach messages to over 125,000 elderly victims. Using suspicious activity forms provided by RSVP volunteers, The FBI reports that on average, the TVCC identifies between 100 and 125 previously unknown operations each year.Posted On
August 30, 2005For More Information
Resources
The National Fraud Information Center offers a "Telemarketing Toolbox" which offers articles in pdf and html format on topics such as "Identity Theft," "Stop Calling Me! Avoid Sales Calls," and other "Telemarketing Fraud Tips." Go online to http://www.fraud.org/toolbox/members.htm to access these materials.
The Electronic Investor Resources Centre (eIRC) at http://www.eirc.hk/eirc/html/EN/index.htm is an investor portal operated by the Securities and Futures Commission (SFC). The "Investor Alert" section of their website alerts consumers to boiler room frauds, scam websites and phishing tricks.
Related Practices
No related practicesRelated sites
National Fraud Information Center