It is estimated that consumers lose approximately $40 billion a year in telemarketing fraud. Because the problem of telemarketing fraud and abuse has expanded to a magnitude that it has exceeded the resources of the Federal Trade Commission, the US Congress recently passed legislation "Telemarketing and Consumer Fraud and Abuse Prevention Act" to address this serious issue (Public Law 103-297, August 16, 1994).
This legislation directs the Federal Trade Commission to promulgate rules to prohibit deceptive telemarketing practices that facilitate laundering and fraudulently using credit card numbers; prohibit unsolicited telephone calls that a reasonable consumer would consider coercive or an abuse of the right to privacy; restrict the hours during the day and night during which unsolicited telephone calls may be made; and require that the purpose of the telemarketing call must be disclosed promptly and clearly to the consumer.
Prior to this legislation, a victim, or representative of the victim, could seek assistance from the state attorney general to determine if the telemarketing practices violated the interests of the residents of the state. If state statutes were violated, the individual could seek the attorney general's intervention to stop the telemarketing practices and obtain restitution or compensation for the state's residents who have been harmed by the telemarketing procedures. The victim also could personally sue the alleged perpetrator of the telemarketing fraud under available state statutes. This legislation does not replace either one of these forms of restitution.
This legislation provides an additional federal statute and accompanying rules that may be used by the State attorney general in seeking compensation for the money that has been fraudulently obtained via telemarketing. This statute also provides the individual with the authority to claim that a violation of the federal legislation has occurred and that the appropriate forum for a lawsuit regarding telemarketing fraud is the federal district court. In order to bring a private lawsuit under this legislation, the individual must allege that the fraud occurred within three years of the filing of the lawsuit and that the individual's financial damages exceeded $50,000.
Based upon the magnitude of the problem, it is clear that the intention of some telemarketing companies is to obtain an agreement for payment, but never deliver the agreed upon merchandise. Payment may be solicited by having the consumer provide a credit card number via telephone, make a lump sum payment at the beginning of the transaction by personal or cashiers check, or make multiple periodic payments. Some elderly adults may have limited or fragile decision-making skills or may have a desperate desire to obtain an item that has been a lifelong dream, such as a home in a warm climate. These vulnerable individuals may not be able to recognize the warning signs of fraud, deception, and coercion.
Gerontological nurses should be aware of the enormity of the problem and participate in community programs that emphasize the need for cautious disclosure of financial information, such as credit card numbers and bank account numbers. Any attempt at consumer education may be valuable reminders to the elderly that even a friendly, seemingly concerned caller may be attempting to deceive them. If the elder is financially abused by a telemarketing scheme, the legislation provides another avenue of redress in attempting to recapture the consumer's financial loss.
- Telemarketing and Consumer Fraud and Abuse Prevention Act Public Law 103-297. August 16, 1994.