How to Spot a Telephone Scam

Americans lose an estimated $40 billion each year to telephone scams. The simple fact is that if something sounds too good to be true, it probably is a scam. There are many forms of telephone fraud but here are a few of the most common.

Travel Offers

Travel offers by telephone are a major area for consumer telephone scams. It involves a company calling consumers and falsely informing them they have been personally selected to receive a special offer. In reality, the consumer hasn’t won anything but was randomly called by an autodialing system in most cases. The so-called offer is usually a discount travel package, travel club membership, or timeshare. These offers are not prizes but are actually solicitations. Additionally, these telephone scam travel offers are never actually a good value. They include exorbitant hidden fees and costs and often require you to sit through long-winded sales presentations for over-priced and under-valued travel packages.

Free Prize Notifications

Telephone scams often involve fake prize notifications to obtain money and information from consumers. The telephone scam works like this. The company calls consumers randomly to inform the consumer they have won a prize. They then require a payment of fees from the consumer for shipping, handling, membership, or some other nonsense. Some of these con artists are stealing the fees outright while others use the credit card or banking information fraudulently to steal even larger amounts. Many of these prize notification scams are also framed as travel offers as discussed above.


It is unconscionable that anyone would steal money from consumers under the guise of soliciting charitable donations but the simple fact is that it happens every day. Many calls you receive are actually from charities with legitimate needs but never pay them by telephone unless you know exactly who they are through some independent means. For example, Friends of MS calls my home four or five times every year but we know exactly with whom we are dealing. The same caller, whom we now know by name, calls us each time and never even asks for money by telephone. Instead, they want clothing donations left on our doorstep. In contrast, the people committing telephone scams won’t want clothing, they will want cash or credit card information by telephone and they will want it right now.

Under Utah Law legitimate charities are required to obtain registration from the state and provide you with their permit number and what percentage of your donation will go toward the charitable purpose. You can check these permits at the Utah Division of Consumer Protection website.

Fraudulent Debt Collections

Some telephone scam artists will call you to collect a debt you do not owe. Venerable consumers sometimes make a payment over the telephone just to escape the uncomfortable pressure exerted by these crooks. If a company calls to collect a debt always ask for written validation of the debt but do not provide them with your address. If the debt is actually yours they already have your contact information. If they then fail to send written proof of the debt and their identity and you don’t recognize the debt as yours they are probably scamming you.

Advance Fee Loans

Some telephone scam companies will call to offer you a loan. To do so they will require a payment from you in advance. These companies are either stealing from you outright by using the information for that advance fee to access and drain your account or they are planning to deny your loan while keeping the non-refundable advance fee. Either way, it is a scam. Use banks or credit unions if you need a legitimate loan.

Investment Fraud

Investment advice is never reliable when obtained through a telephone call you did not initiate. Nonetheless, many consumers fall victim to investment telephone scams when they think they are privy to inside information about an investment. These con artists will use every high-pressure sales technique in the book and even instruct you to keep your involvement secret as if you are somehow invited into an inner circle of investment gurus. The truth is that actual investment advisors never cold call potential investors and request money over the phone.


The best advice to avoid being ripped off by a telephone scam artist is to never buy anything from a company or person calling you cold. If they won’t provide you with written notification of a prize, travel offer, debt collection, or other solicitation then they are scamming you. Legitimate companies will always openly and willingly provide you with written information about themselves and their services and products and a telephone scam company usually won’t.

Identity Theft Targeting Younger Victims

Identity theft is targeting younger victims and still a growing crime according to the Consumer Sentinel Network Data Book, recently released by the Federal Trade Commission. Not surprisingly, the age of the victims is dropping each year as younger consumers increasingly shop online without properly protecting their personal information. It seems the younger generation, though raised on personal computers, lacks the street smarts needed to match the identity thieves’ techniques.

Most surprising are the FTC’s recommended solutions for restoring your identity after a theft occurs. With two million victims every year – and growing – you would think the FTC would advise consumers to do more than merely report identity thefts and place initial fraud alerts. Yes, a fraud alert is an important step in the process but much more needs to be done. Reporting the crime to the FTC as they recommend is just an exercise in futility, doing nothing to actually help the victim restore their stolen identity.

Most important in reporting identity theft is the method by which the identity restoration is approached. There are several critical legal issues involved with reporting identity theft that if done improperly can have disastrous results for the consumer. For example, if consumers fail to include certain documentation or use the correct language in their communications with creditors and debt collectors they can be held liable for identity theft debt. The same problem arises when consumers try to remove identity theft debt from credit reports. Using the wrong language or taking the wrong approach in dispute or challenge letters will result in denials to investigate or delete the information. At a minimum the process of identity restoration will be delayed by failing to take the proper steps.

In addition to the financial ramifications, identity theft can also be emotionally devastating to the victims. Many victims of identity theft report symptoms of emotional distress similar to victims of violent crime. Restoring the consumer’s identity after a theft occurs simply adds to the stress these victims face.

The best advice to consumers is to report identity theft correctly and carefully. If consumers are unsure how to do so or if they are a victim of criminal identity theft they should contact an experienced consumer protection attorney who can walk them through the process.

How to Report Identity Theft

How to report identity theft.

It only takes a few simple steps to report identity theft and clear up your good name and end the devastating financial and emotional harm caused by identity theft.

Step One

Set an initial fraud alert with at least one of the three major credit bureaus. Only one is needed because the credit bureaus are required to alert each other when a fraud alert is placed. If you want to be sure fraud alerts are placed on all three then feel free to contact all three. It doesn’t take much time to take this first step to report identity theft and doing so will give you a little additional peace of mind.

Step Two

Obtain your free annual credit report and review it closely to identify which accounts are the result of identity theft.

Step Three

Complete an identity theft affidavit. Be sure to fill it out accurately and completely. You can be criminally prosecuted for lying in an identity theft affidavit.

Step Four

File a police report of the identity theft. No, the police probably won’t do anything to actually help; however, the police identity theft report itself is an invaluable and often required part of clearing up your credit information resulting from identity theft.

Step Five

Contact the three major credit bureaus in writing and request they delete the information that is the result of identity theft. Identify the information clearly and include a copy of the police report and identity theft affidavit to prove your request is valid.

Step Six

Contact each creditor involved and close all accounts that are the result of identity theft. As you did earlier, include a copy of the police report and identity theft affidavit. When you close the accounts also ask the lender to send you all the documentation it has about the account. This will later help with the investigation of the identity theft.

Step Seven

The final step to correctly report identity theft is to set an extended fraud alert on your credit reports. This alert is valid for seven years and works well to prevent future theft of your identity from occurring during that time.


Not all identity theft can be corrected in this way but the more simple case can be. If the above steps to report identity theft fail or if more complicated issues arise, such as criminal identity theft or mortgage identity theft, you should contact an attorney to assist you.

How to Prevent Identity Theft

Identity theft is one of the fastest growing crimes in history but it is relatively easy to prevent identity theft in most cases.  Millions of consumers fall victim to it every year and regrettably, the effects of identity theft are significant.  Many victims of identity theft are so traumatized they often report symptoms of mental and emotional distress similar to victims of violent crime.

The good news is that it is easy to prevent identity theft from happening to you.  Here are a few tips to stop identity theft before it ever occurs:

  • Use only secure Internet connections, websites, and browsers
  • Never open an email originating from an unknown source
  • Never click a link or open an attachment send to you by email
  • Use different passwords for different websites and make sure the passwords are too long and complicated to guess or decipher
  • Use security questions and answers for online websites to which you enroll
  • For online purchases use a credit card rather than a debit card
  • Always use software such as virus protection, firewalls, malware protection, and spam filters; even on smartphones and tablet computers
  • When possible use cash to pay for purchases
  • Never give out personal information over the telephone unless you initiated the call and are 100% certain you are giving it to a trusted company
  • Never carry you social security card in your wallet
  • Don’t disclose your social security number to anyone unless absolutely required
  • Carefully review all your financial records and billing statements every month to watch for unauthorized charges
  • Obtain your free Annual Credit Report once a year to check for unauthorized accounts opened in your name

Taking all of the above steps will prevent identity theft most of the time though it won’t prevent it all.  Even so, use caution in disclosing your personal information and you will be far less likely to become a victim than someone who is less guarded. The simple fact is that you are your own best defense to prevent identity theft.  If your identity does get stolen there are several steps you can take to restore your identity though it is better to avoid identity theft in the first place.

Credit Repair Scams: Part Two

We previously discussed a few common credit repair scams but believe it or not, there are additional deceptive or fraudulent acts in the credit repair world to be cautious about.

Purposely Delaying the Credit Repair Process

Most credit repair companies charge monthly fees which encourages them to work slowly or inefficiently. The simple fact is that the longer you stay enrolled the more money they make. Credit repair does take time but if the company has already disputed every disputable item twice and tells you the third time is a charm, they are probably lying. The truth is that disputing an item three or more times without any additional justification is highly unlikely to result in a deletion. The only certainty in this situation is that sending the additional disputes will cost you additional monthly fees.

Contractual Waivers of Consumer Rights

Though not strictly considered a credit repair scam, almost all credit repair companies put a waiver of your consumer rights clause in your contract. Arbitration clauses or waivers of your right to participate in a class action are the most common waivers used but others occur as well. In certain situations, such waivers are void and considered to be deceptive sales practices under the Credit Repair Organizations Act (CROA) and also under many state unfair practices acts. In some situations these waivers are actually legal, however, so consult a consumer rights attorney to find out whether this is a violation in your state. Frankly, however, even if these waivers were not unlawful or deceptive you should ask yourself if you really want to do business with a company that proclaims to be a champion of consumer rights yet is so willing to trample yours.

Taking Credit for False Deletions

Credit trade lines naturally fall off your reports after a certain amount of time. The period varies but is generally seven years. Some credit report repair organizations take credit for these natural fall-offs even when the company made no contribution whatsoever to that deletion. They will even take credit for items removed as a result of the client’s self-help efforts. Taking credit for the work of others or for the mere passage of time is a shameful practice but is rampant among credit report repair companies.

Misstating or Falsifying Results

Most credit repair organizations brag about their results. Testimonials are most common but numerous websites purporting to be unbiased reviews are also typical. Though it is difficult to detect which ones, many of those website reviews and testimonials are outright fakes. In many circumstances, the company will use commissioned agents or affiliates to enroll clients. Because the paychecks of these salesmen are tied directly to enrolling clients, they have ample incentive to falsify or exaggerate past results. Be cautious of any company who brags about past results that cannot be independently verified.


These and other credit repair rip-offs are shockingly common in the credit repair industry. Your best method of avoiding these scams is to completely ignore mainstream credit repair companies. Instead, do your own credit repair or find a licensed consumer law attorney who takes his oaths of integrity, diligence, and confidentiality seriously. Either way, it is always good practice to use your best judgment and never rely solely on the words of easily faked testimonials or commissioned sales persons.

Credit Repair Scams

You may be surprised to know that there are many common types of scams in the credit repair industry.  Under federal law any deceptive or fraudulent act by a credit repair organization is considered a credit repair scam but other acts can also be unlawful. Many states also have similar prohibitions.

Deceptive Representations

The most common credit repair rip-offs occur when the credit repair organization falsely promises or implies that it can achieve specific, improbable, or illegal results or that it has some special authority that other companies lack. Under the Credit Repair Organizations Act (CROA) such implications are prohibited. Numerous credit repair organizations commit this violation; however, it occurs most often with credit repair companies who use commissioned salesman to enroll clients. Because sales are driven by commissions, the truth is often obscured by false promises and outright deceptions.

Failure to Adhere to State Registration Requirements

In most states, credit repair organizations are required to register with the state as a credit repair organization. Many companies ignore this requirement and choose instead to operate unlawfully without the registration. Doing so violates not only many state deceptive sales practices acts but also violates CROA. A lack of the required registration is a credit repair scam because it constitutes an untrue or misleading representation of the credit repair organizations services and also constitutes a fraud or deception that the company is operating lawfully when it is not. This violation is surprisingly common.

Charging Fees before the Work is Fully Performed

Another commonly used tactic is to charge the consumer fees before the credit repair firm has fully completed the promised work. This ordinarily occurs when the firm charges a fee to setup the case without performing any substantive work or charges a monthly fee without performing any work the previous month. Indeed, such billing practices are fairly common in the industry.

Failure to Provide Required Disclosures

A less prevalent though still significant credit repair scam arises when the credit repair company fails to provide the consumer with the federally required disclosures. Under federal law, these companies are required to provide certain disclosures to the consumer to instruct the consumer of their legal rights.  Some companies fail to provide the disclosures in any form while others provide only partial disclosures. Either way is unlawful.


There are numerous other scams or rip-offs related to credit repair but the few discussed above are the most common. To avoid these swindles you should only hire a credit repair company who takes its ethical and legal obligations seriously and specifically charges you only for actual work performed rather than charging you junk fees to merely start your case. Use diligence and don’t rely solely on website reviews or a high volume of advertised clients to choose a credit repair partner. In most cases, your best partner in credit repair is going to be a local consumer law attorney who will work with you personally and in strict adherence to CROA and his state bar requirements.

How to Get a Refund

It can be hard to get a refund for something you bought that doesn’t work or doesn’t do what the salesman said it would do. The good news is that it is often easier than you might think to get a refund. Here are step-by-step instructions that will work in many situations. In more complicated situations you may need to contact an experienced consumer rights attorney for assistance.

Step One:

Call and ask about getting a refund. Explain the problem and be as nice as possible.  Many companies pride themselves on good customer service and are more than happy to help you get a refund. Being nice is the key here. Don’t yell, swear, or threaten anyone. Be nice even if they turn down your refund request.

Step Two:

If the company refuses your first refund request give the matter a day or two and then call back and speak with a supervisor or manager. Many companies will either refuse to escalate the call or even put a low-level customer service agent on the phone pretending to be a manager but ask anyway.  Proceed as you did in Step One and simply and nicely ask for a refund. Don’t get angry no matter what response you get. You can get a refund if you don’t give up. It just might take a little more effort.

Step Three:

If the company rejects or ignores both of your verbal refund requests it is time to write a letter to the company requesting a refund. Again, be nice. Simply explain the issue without making any threats and send the letter to the company’s billing dispute department if it has one. If not, send it to their customer service address. Send the letter by certified mail and allow the company 30 days to investigate your complaint. It may call, so be prepared to calmly discuss the issue.

Step Four:

If the company doesn’t respond and fails to issue the refund after 30 days, it is time to escalate your complaint. Write a second letter and this time send it to an executive such as the company president or vice president. Use the Internet to find the correct name and address. Stay nice and calmly explain your complaint and why you want to get a refund. Do not threaten them in any way. Send the letter certified mail. If after 30 days they still fail to respond or issue a refund, proceed to Step Five.

Step Five:

If you are sure you have a legal basis to get a refund your next step is to advise the company of your intention to sue. Have an attorney review your complaint to be sure you are justified in requesting a refund. An official opinion about the merits of your case from a consumer law attorney will help you avoid wasting any time or money pursuing a losing issue. Frankly, if you are not absolutely certain you have a legal justification, you should have stopped trying to get a refund at Step Two. Furthermore, do not threaten to sue unless you absolutely WILL sue. Empty threats make you a jerk, not an informed consumer. In the letter you still need to be nice even though you are advising the company you plan to sue. Respect goes a long way here and if you show anger or frustration the company is less likely to take you seriously. Again, send this letter by certified mail.

Step Six:

If, after 30 more days, the company still has not issued a refund or contacted you to discuss the matter it is time to sue. Typically, suing in small claims court is your best option but, in many cases, hiring an attorney and proceeding in a higher court is more likely to succeed in getting you a refund. It really depends on how much money is at issue. Either way, going to court is a drastic and sometimes stressful occasion so don’t do it alone if you aren’t sure of your ability to handle it properly.

If needed, feel free to review our previous article for more information about the process of suing a company in small claims court.

How to Sue in Small Claims Court

Small claims court is often the best option available to enforce your rights against a deceptive or abusive company. Filing fees are much lower than in higher courts and the procedural and evidentiary rules are relatively relaxed and simple. Indeed, the small claims court judges themselves will typically apply the rules appropriately and fairly and will interpret the legal issues necessary to rule in your case. In most cases you will simply tell the judge your side of the story and he will do the rest. The process is designed to be as simple and consumer-friendly as possible.

To start your small claim court case, your first step is to determine which small claim court is most appropriate to hear it. In a contract dispute the appropriate court will be located in the county in which the contract was entered or the work was to be performed. In injury cases, the small claim court used will normally be where the injury occurred. If the case involves a real property dispute the proper court will typically be the county in which the property is located. If you are unsure, consult your state’s rules governing small claims procedure to determine the appropriate venue for your case.

Your next step is to download and complete the following forms from the court’s website:

  • Small Claims Court Complaint (sometimes entitled Affidavit)
  • Summons
  • Military Affidavit

Once the forms are completed, file the Small Claims Complaint or Affidavit and Military Affidavit with the court. You will pay a filing fee at that time and the court will issue the Summons and return it to you.

Your next step is to serve a copy of the Complaint and Summons on the Defendant. Some small claims courts will have a box or shelf where you can place a copy of the Complaint and Summons to be served but, if not, process servers are easy to find online. Once the process server delivers the documents to the Defendant he will notify the court that the Defendant has been served and send you a bill. Pay it quickly, it is money well spent. You cannot serve the Defendant so do not try. A disinterested person of suitable age must serve process and certify under oath and penalty of perjury it has properly served the Defendant. Your case dies if this doesn’t occur properly. In limited circumstances you can serve the Defendant by mail but check your local rules for the exact requirements. Again your small claims court case dies if this is not done correctly.

Your next step is to prepare for trial. Make three copies of all documents on which you plan to rely; one for you, one for the Defendant, and one for the court. Make a checklist of your talking points and important facts but do not waste any time or effort preparing a detailed script. You will not need it.  If you have witnesses make sure they are coming to the trial. If needed, you can have the small claims court issue a subpoena to make them appear but only do so if the witness is openly hostile and you think they probably won’t show up. Seriously, you will almost certainly be sleeping on the couch if you subpoena your spouse.

At trial, simply tell the small claims court judge your story.  Use your checklist to be sure you don’t forget any important facts. The judge will ask you and your witnesses questions and he expects very concise and specific answers. He does not want a long monolog detailing every nuance of your feelings about the situation. The judge only wants the facts important in deciding how to apply the law to your case.  He will know what questions are important and what issues on which to focus. If you think he is missing an important fact or issue tell him what you think he needs to know, but again, keep it brief.

Once he has heard from the parties and witnesses the judge will then make his ruling from the bench.  On rare occasions he will take your case under advisement and issue a ruling in a couple of weeks but doing so is extremely unusual so don’t expect it. If you win your case, the court will provide you with a judgment form. Send a copy to the Defendant by certified mail even if he appeared in court. You want proof he received it. The Defendant will typically have up to 30 days to appeal the small claims court judgment but you can begin collecting on the judgment immediately if you wish.

Now that you know how to take a case to small claims court you can be your own advocate. In many cases where deceptive and fraudulent sales practices are involved, however, you may want to consult with a consumer law attorney to determine whether or not a particular statute can help to maximize your damage award. In consumer law cases statutory damages are frequently higher than your actual damages. It is an important detail you do not want to miss.

Suing Telemarketers

Telemarketers sometimes have a hard time taking no for an answer.  The first step to ending the calls is to simply ask the telemarketer to stop calling you.  Once you ask, the telemarketer is required by law to stop calling.  Record the details of your request for it to stop calling such as the date, time, and person with whom you spoke, and take a picture of the caller ID for later use.  Writing a letter to the telemarketing company can also sometimes help stop the calls.  Then, if the telemarketer continues calling you have proof you asked for the calls to stop.

You should also put your telephone number on the federal do not call list.  Doing so will stop most reputable telemarketers (if there is such a thing).  For those who do not stop calling, inclusion of your number in the do not call registry provides you additional proof of wrongdoing and creates an additional cause of action against the telemarketer if you decide to sue.

If the steps above do not stop the calls, suing the telemarketer may be your only option.  Use caution, however.  If you have conducted business with the company in the last three months or have given it permission to call you, it is probably not violating the do not call rules until you tell it to stop calling.

You can also sue abusive telemarketers for calling you before 8:00 in the morning or after 9:00 at night, for using an automated dialer to call your cell phone, or failing to provide you a copy of their do not call policy when you request it.

If you sue a telemarketer you could receive a substantial award or settlement but only if you have all your ducks in a row.  Failing to have the required evidence or suing when the telemarketing company has a legal defense could blow up in your face.  If you successfully prove your case, the court can award you up to $500 in statutory damages per violation and, if the telemarketer willfully or knowingly violated the law, up to $1500 for each violation.

Such high statutory damages are powerful tools in the fight against abusive marketing calls but don’t dismiss the effectiveness of the do not call registry and asking callers to stop as good measures toward preventing the vast majority of these calls.  Either way, when you fight against these unwanted privacy intrusions properly, peace and quiet are the ultimate result.

How to Stop Telemarketing Calls

Getting unwanted telemarketing calls can be annoying or downright aggravating depending when it comes or how long it takes to get the caller off the phone. When the telemarketing calls come daily, or sometimes more often, the harassment starts to take quite a toll on even the most patient person. The good news is that stopping most telemarketing calls is easy.

The first step to stop telemarketing calls is to put your telephone number on the federal Do Not Call Registry. Once you do it should take less than 30 days for most telemarketers to stop calling you. Most states also have their own do not call registries you can use in conjunction with the federal Registry. Use both to get the best results. Keep in mind that charities and political candidates can still call you since they are not subject to the do not call regulations.

The next step to stopping the annoying telemarketing calls is to simply tell the abusive telemarketer you want them to stop calling. This is less effective than using the do not call registry but creates an obligation for the telemarketer to put you on its own do not call list and to stop calling you within a reasonable time. Most will stop calling within a few days of your request but a few unscrupulous companies will often continue calling even after you tell them to stop.

Those two simple steps will stop most telemarketing calls. If the telemarketing calls continue gather your telephone records and keep a log of all harassing calls including, who called, when they called, what number they called from, what you told them, and what they told you. A sample log for your personal use is available here. You should also take a picture of the caller ID every time a telemarketer calls and, if legal in your state, record the call. In Utah only one party to a conversation has to consent so feel free to record telemarketing calls if you reside in Utah. If any telemarketers leave you messages record those too.

If telemarketers keep calling you after placing your number on the do not call registry and telling them to stop your best option is to sue. It may seem drastic but suing is not only a sure-fire way to stop the telemarketing calls, it can also be rewarding. Violations for breaking the telemarketing rules can be up to $500 per violation and even higher in some circumstances. You will need the log, recordings, and your telephone records discussed above to prove your claim so be sure to keep accurate and timely records.

Stopping most telemarketing calls is generally easy. For the unscrupulous few who won’t give up so easily, suing is your best option. In either case, if you have any questions or need help with a particularly obnoxious telemarketer feel free to call us.

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