Consumer Fraud By Phone or Mail

The United States Postal Inspection Service
Congressional & Public Affairs Branch
475 L'enfant Plaza, SW
Washington, D.C. 20260-2160

DON'T TAKE THE BAIT

When phone calls and postcards are bringing you marvelous offers to buy:
--Vitamins
--Low-cost vacations
--Office supplies or promotional items
--Club memberships
--Sure-fire investments

Do they say:
--"You've just won a contest, and if you pay 'shipping and handling' or
a small gift tax,' it's all yours."?

Do they want:
--Your credit card number?

If so, you may be the victim of a BOILER ROOM FRAUD.

DIRECT MARKETING VS BOILER ROOM FRAUD

Direct marketing is the sale of goods and services by direct contact
with the consumer by telephone or mail.

Boiler room fraud costs consumers nearly a billion dollars a year. Boiler room
fraud is the use of the phone or the mail by unethical companies who only want
to take your money. It is a growing problem for both individuals and businesses.
The best way to protect yourself is to learn to recognize the warning signs.

WHO ARE THE BOILER ROOM COMPANIES?

--Most calls come from firms located out-of-state. The firms work out of large
rooms with rows of phones staffed by solicitors trained to repeat a deceptive
sales pitch.
--Sometimes these firms send you an enticing or official-looking letter or
postcard in the mail urging you to call them.
--Sometimes 900 numbers are used so you'll be billed just for calling
them, even if you decide not to purchase anything.

WHAT DO THE SALESPEOPLE SAY?

Here are some common phrases:
--"You've been specially selected to hear this offer."
--"You'll get a wonderful free bonus if you buy our product."
--"You've won a valuable free prize."
--"This investment is low-risk and provides a higher return than you can get
anywhere else."
--"You have to make up your mind right away."
--"You can just put the shipping and handling charge on your credit
card."

The callers use well-rehearsed sales pitches designed to sound believable. You
may be transferring from person to person, so it sounds like a genuine business
setting. A "vice-president" may even call you back to try to convince you to
buy. Beware of high pressure pitches that require decisions right now!
Legitimate firms will always give you time to think it over.

WHAT IF YOU FALL FOR THE BOILER ROOM PITCH?

If you are the victim of a Boiler Room Fraud, you may later find:
--The merchandise you bought is overpriced and poor quality.
--The "free gift" never arrives, or it's worth just a fraction of the "shipping
and handling" or "gift tax" you paid.
--The investment turns out to be non-existent, or a loser.
--The donation you thought was going to charity goes into the fund-raisers
pocket.
--Unauthorized charges start appearing on your credit card bills.
--900 number telephone charges are much higher than you expected.

HOW CAN YOU PROTECT YOURSELF?

--Take your time.
--Don't buy something merely because you'll get a "free gift."
--Get all information in writing before you agree to buy.
--Check out the caller's record with the Attorney General's Office and
the Better Business Bureau.
--Don't give your credit card number or checking account number to
anyone who calls on the phone or sends you a postcard.
--Check out a charity before you give. Ask a charity how much of your donation
actually goes to the charity.
--be extremely cautious about investing with an unknown caller who
insists you must make up your mind immediately.
--If the investment is a security, check with state officials to see if
it is properly registered. If large amounts of money are involved, check with
your legal or financial advisor.
--Don't send money by messenger or overnight mail. If you use money rather than
a credit card in the transaction, you may lose your right to dispute fraudulent
charges.
--Hang up instead of being pressured to buy.
--If it sounds too good to be true, it probably is.
--make sure you know the per minute charge for any 900 number call you make.

DON'T TAKE THE BAIT!

Ask yourself these questions:
--Do I have adequate TIME TO THINK THIS OVER, or am I being pressured for a
decision right now?
--Will they send me ADDITIONAL INFORMATION through the mail, putting their
statements and promises in writing, or do they refuse?
--Are they insisting on my CREDIT CARD OR CHECKING ACCOUNT NUMBER right now?
--Do they want to SEND OVER A PRIVATE COURIER tonight for my check?
--Is my "free gift or prize" really free, or DO I HAVE TO PAY A
REGISTRATION FEE OR SHIPPING AND HANDLING CHARGE before receiving anything?

If the answer to any one of these question is yes...BEWARE! Take time to
consider the offer, get additional information and advice, and resist the "take
it or leave it" high pressure tactics so often used by boiler room pitches. See
below for agencies which can provide additional information.

For more helpful information about the firm or offer you are considering,
contact any of the following, preferably in the city or state where the firm is
located:

State and Local Consumer Protection Agencies
Better Business Bureau
State Attorney General
Chamber of Commerce
State Securities Regulator
Federal Trade Commission
Federal Bureau of Investigation
The U.S. Postal Inspection Service

If you think you are the victim of a boiler room fraud, save all
documentation of the transaction, including postcards, canceled checks,
telephone bills, credit card statements and mailing envelopes. Make detailed
notes of your telephone conversations by date and time, and write down the
important statements made by each individual who spoke with you.

If any part of your transaction took place through the U.S. Mail, including the
receipt of promotional literature or the mailing of payment, we urge you to
contact the nearest postal inspector's address, or write directly to:

The Chief Postal Inspector
475 L'enfant Plaza SW
Washington, D.C. 20260-2160

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