Business Scams Buying and Working at Home Cars Charities Know Your Consumer Rights Mail Call Telemarketing (Tips from the F.T.C)

Business Scams

1. Phony Yellow Page Billing
Businesses across the country are receiving what appear to be bogus invoices for ad space in the Yellow Pages directory. In fact, some "invoices" are solicitations for listings in alternative business directories.

What Causes the Confusion:
The familiar "walking fingers" logo and the name "Yellow Pages" are not protected by any federal trademark registration or copyright. Therefore, you may be led to believe that anyone who uses the logo and the name is affiliated with the publisher that distributes the telephone books and Yellow Pages directories to all households and businesses. Alternative business directories generally are not available or distributed to the public, therefore, they provide little, if any, benefit to businesses who paid to advertise in them.

Characteristics of a Phony Yellow Page Invoice:
The solicitation from an alternative business directory may have the appearance of an invoice. The solicitation may lead you to believe that your business already has been listed in the telephone directory and that you are now being billed when, in fact, you are only being solicited for placing an ad.

How To Protect Yourself:
Examine the piece of mail you have received and determine whether it is a solicitation or an invoice. If it is an invoice, you should see a disclaimer required by the U.S. Postal Service. It states THIS IS NOT A BILL. THIS IS A SOLICITATION. YOU ARE UNDER NO OBLIGATION TO PAY THE AMOUNT STATED ABOVE UNLESS YOU ACCEPT THIS OFFER.

What To Do If You Are a Victim:
If you believe you have been the victim of this misrepresentation scheme, contact your Postmaster at:

Postal Inspector
P.O. Box 6866
Providence, RI 02940-6866

2. Charitable Donations
You may be asked on numerous occasions to donate to charitable organizations. Asking questions about the nature and activities of the organization is the only way you can be sure the money you contribute will support worthwhile causes. In order to protect yourself, you should:

• Ask for written information, including the charity's name, address and telephone number.
• A charity may use a professional fundraising company to solicit donations. If that is the case, you have the right to ask what percentage your donation will go to the charity as opposed to the fundraiser.
• Call the charity in order to find out if the organization is aware of the solicitation and has authorized the use of its name.
• Watch out for similar sounding names as some phony charities use names that closely resemble those of respected, legitimate organizations.
• Know the difference between "tax exempt" and "tax deductible". Tax exempt means the organization does not have to pay taxes. Tax deductible means you can deduct your contribution on your Federal income tax return. Even though an organization is tax exempt, your contribution may not be tax deductible. If deductibility is important to you, ask for a receipt showing the amount of your contribution and stating that it is tax deductible.

Before you write the check, check out the organization by contacting the following:

National Charities Information Bureau
19 Union Square West, 6th Floor
New York, NY 10003-3395
(212) 929-6300
http://www.give.org

R.I. Department of Business Regulation
Charities Organization Section
233 Richmond Street
Providence, RI 02903
(401) 222-3048

Buying and Working at Home

Shopping by Phone and Mail

1. Shopping by Phone and Mail
In this "information age" in which we live, shopping by phone, mail, computer or fax is convenient and can save us time. Here are some practical things you can do to maximize the satisfaction with your purchases and to get the greatest value for your money whenever you use any of these methods to buy things.

Find out, beforehand, what the company's return and refund policies are. If you have friends or neighbors who have already done business with the company, ask them about its track record for customer satisfaction.

Whether you shop by phone, mail, computer or fax, the Federal Trade Commission's "Mail or Telephone Order Rule" can protect you. For example:

• Unless otherwise specified in their ads, businesses have to send your order to you within 30 days after you place it.
• If the business can't meet the 30 day requirement, it must notify you in writing, offer you the chance to cancel, and give a full refund.

If you pay for purchases made by any of these means with a credit card, a Federal law called the Fair Credit Billing Act also protects you. For example, if you find that a wrong amount appears on your credit card monthly statement or if it indicates you bought something which you did not buy, take the following steps right away:

1. Write to your credit card issuer at the special address listed on your monthly statement for "billing inquiries" or "billing errors". Include your name, address, credit card number and a description of the billing error. Keep a copy of the letter for your records.
2. Be sure to "dispute the charge" always in writing, as soon as possible. You have a maximum of sixty (60) days to request an investigation of an improper charge. Your credit card issuer has two (2) billing cycles or a maximum of ninety (90) days to complete the investigation of your complaint. It must write to you within thirty (30) days after you sent it to acknowledge your complaint.
3. Finally, remember that while your complaint is being investigated, you don't have to pay the disputed part of your balance. You do, however, have to pay any undisputed amount including finance charges which are part of the undisputed claim.

2. Work at Home Schemes
"Want to earn hundreds of dollars a week - at home in your leisure time? Many people supplement their income in a very easy way. Let us tell you how..."

Ads like this can be found in newspapers and magazines in every American city. While you may find such offers appealing, especially if you can't work outside your home, exercise caution. While some work-at-home plans are legitimate, many are not. Home employment schemes are among the oldest kinds of classified advertising fraud.

Many ads don't say you may have to work many hours without pay or that there may be hidden costs.

Common work-at-home schemes:

1. Envelope stuffing. Promoters usually advertise that for a "small" fee, they will tell you how to earn money stuffing envelopes at home. Instead, for your fee, you're likely to get a letter telling you to place the same "envelope-stuffing" ad in newspapers and magazines, or to send the ad to friends and relatives.
2. Assembly or Craft Work. These programs often require you to invest hundreds of dollars in equipment or supplies. However, after you've purchased the supplies or equipment and performed the work, fraudulent operators don't pay you.

Exercise caution:
Here are some questions you might ask a potential employer:

1. What tasks will I be required to perform?
2. Will I be paid a salary or on commission?
3. Who will pay me?
4. What is the total cost of the work-at-home program, including supplies, equipment, and membership fees?

Where to complain:
If you have spent money and time in a work-at-home program and you now believe it may not be legitimate, contact the company and ask for a refund. f you can't resolve the dispute with the company, please contact our office for assistance.

Cars

1. BUYING A NEW CAR

Think about what car model and options you want and how much you're willing to spend. Do some research. You'll be less likely to feel pressured into making a hasty or expensive decision at the showroom and more likely to get a better deal.

Consider these suggestions:

• Shop around to get the best possible price by comparing models and prices at dealer showrooms. You also may want to contact car-buying services and broker-buying services to make comparisons.
• Plan to negotiate on price. Dealers may be willing to bargain on their profit margin, often between 10 and 20 percent. Usually, this is the difference between the manufacturer's suggested retail price and the invoice price.
• Consider ordering your new car if you don't see what you want on the dealer's lot. This may involve a delay, but cars on the lot may have options you don't want - and that can raise the price.

Financing Your New Car
If you decide to finance your car, check the dealer's rate against banks, credit unions, savings and loans institutions, and other loan companies. Because interest rates vary, shop around for the best deal, comparing the annual percentage rates (APR).

Trading in Your Old Car
Discuss the possibility of a trade-in only after you've negotiated the best possible price for your new car and after you've researched the value of your old car.

Considering a Service Contract
Service contracts that you may buy with a new car provide for the repair of certain parts or problems. These contracts are offered by manufacturers, dealers, or independent companies and can run concurrently with the manufacturer's warranty. Remember that a warranty is included in the price of the car while a service contract costs extra.

Before deciding to purchase a service contract, read it carefully and consider these questions:

• What's the difference between the coverage under the warranty and the coverage under the service contract?
• What repairs are covered?
• Who pays for the labor? The parts?
• Who performs the repairs? Can repairs be made elsewhere?
• How long does the service contract last?
• What are the cancellation and refund policies?
  

2. BUYING A USED CAR

If you go to a dealer for a used car, look for a "Buyers Guide" sticker on the window of each car. The Buyers Guide, required by the Federal Trade Commission's Used Car Rule, gives you important information and suggestions to consider. The Buyers Guide tells you:

• if the vehicle comes with a warranty and, if so, what specific protection the dealer will provide;
• if the vehicle comes without a warranty ("as is") or with an implied warranty only;
• that you should ask to have the car inspected by an independent mechanic before you buy;
• that you should get all promises in writing; and
• What some of the major problems are that may occur in any car.
• The Used Car Rule requires dealers to post the Buyers Guide on all used vehicles, including automobiles, light-duty vans, and light-duty trucks. "Demonstrator" cars also must have Buyers Guides. But Buyers Guides do not have to be posted on motorcycles and most recreational vehicles. Individuals selling fewer than six cars a year are not required to post Buyers Guides.

Whenever you purchase a used car from a dealer, you should receive the original or an identical copy of the Buyers Guide that appeared in the window of the vehicle you bought. The Buyers Guide must reflect any changes in warranty coverage that you may have negotiated with the dealer. It also becomes a part of your sales contract and overrides any contrary provisions that may be in that contract.

3. PRIVATE PARTY CAR SALE

Many cars are available privately, such as through classified ads in a newspaper. If you are shopping for a car from an individual, you should understand several differences between sales made by individuals and by dealers.

• Private sellers generally are not covered by the Used Car Rule and therefore, do not have to use the Buyers Guide. However, you still can follow the Guide's suggestions. For example, you can refer to the list of potential problems displayed on the back of the Buyers Guide shown in this brochure. In addition, ask the seller whether you may have the vehicle inspected by your own mechanic and whether you may take it on a test drive.
• Private sales usually are not covered by the "implied warranties" of state law. So, a private sale probably will be on an "as is" basis, unless your contract with the seller specifically provides otherwise. If you have a written contract, the seller must live up to the promises stated in the contract. Depending on its age, the car also may be covered by a manufacturer's warranty or a separately purchased service contract. However, warranties and service contracts may not be transferable, or there may be limitations or costs for a transfer. Before you purchase the car, ask the seller to let you examine any warranty or service contract on the vehicle.
• In Rhode Island, a vehicle muxt have a valid inspection sticker in order to be sold.
  

4. AUTO REPAIR TIPS

What should I look for when choosing a repair shop?

• Ask for recommendations from friends, family, and other people you trust. Look for an auto repair shop before you need one to avoid being rushed into a last-minute decision.
• Shop around by telephone for the best deal, and compare warranty policies on repairs.
• Ask if the technician or shop has experience working on the same make or model vehicle as yours.

Are there certain things I should know about charges?

Before you arrange to have any work performed, ask how the shop prices its work. Some shops charge a flat rate for labor on auto repairs. This published rate is based on an independent or manufacturer's estimate of the time required to complete repairs. Others charge on the basis of the actual time the technician worked on the repair.

If you need expensive or complicated repairs, or if you have questions about recommended work, consider getting a second opinion.

Find out if there will be a diagnostic charge if you decide to have the work performed elsewhere. Many repair shops charge for diagnostic time.

Shops that do only diagnostic work and do not sell parts or repairs may be able to give you an objective opinion about which repairs are necessary.

If you decide to get the work done, ask for a written estimate.

What should a written estimate include?

• It should identify the condition to be repaired, the parts needed, and the anticipated labor charge. Make sure you get a signed copy.
  It should state that the shop will contact you for approval before they do any work exceeding a specified amount of time or money. State law may require this.

What do I need after the work is done?
Get a completed repair order describing the work done. It should list each repair, parts supplied, the cost of each part, labor charges, and the vehicle's odometer reading when you brought the vehicle in as well as when the repair order was completed. Ask for all replaced parts. They are required to comply with this request.

Charities

CHARITY DONATIONS: GIVE OR TAKE

If a charity or professional fundraiser is soliciting in Rhode Island, it must register with the Department of Business Regulation, Charities Section. The Department of Business Regulation has available for public inspection, upon request, information on the registered charitable organization or professional fundraiser.

With more than a million recognized charities soliciting for charitable contributions, it pays to be cautious when making a donation. Asking questions about the nature and activities of the organization is the only way you can be sure the money you contribute will support worthwhile causes.

Paid Fund-Raisers
Some charities find it more efficient to pay professional fund-raisers to handle large scale mailings, telephone drives, and other solicitations rather than their own paid staff or volunteers. Professional fund-raisers are in business to make money and can legally keep a portion of the money they collect. If you're solicited for a donation, ask if the caller is a paid fund-raiser and what percentage of your donation the fund-raiser will keep. If you're not comfortable with the amount, you may want to consider other options for donating.

Charity Checklist
Whether charitable organizations use their employees, volunteers, or professional fund- raisers to solicit donations by phone, mail, or in person, consider the following precautions to ensure that your donation dollars benefit the people and organizations you want to help.

• Ask for written information, including the charity's name, address, and telephone number. A legitimate charity or fund- raiser will give you materials outlining the charity's mission, how your donation will be used, and proof that your contribution is tax deductible.
• Ask for identification. Many states require paid fund-raisers to identify themselves as such and to name the charity for which they're soliciting. If the solicitor refuses, hang up and report it to the Department of Business Regulation at (401) 222-3048.
• Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you may be dealing with a fraudulent solicitor.
• Watch out for similar sounding names. Some phony charities use names that closely resemble those of respected, legitimate organizations.
• Know the difference between "tax exempt" and "tax deductible." Tax exempt means the organization doesn't have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return. Even though an organization is tax exempt, your contribution may not be tax deductible. If deductibility is important to you, ask for a receipt showing the amount of your contribution and stating that it is tax deductible.

Beware of organizations that use meaningless terms to suggest they are tax exempt charities. For example, the fact that an organization has a "tax I.D. number" doesn't mean it is a charity: all nonprofit and for profit organizations must have tax I.D. numbers. And an invoice that tells you to "keep this receipt for your records" doesn't mean your donation is tax deductible or the organization is tax exempt.

• Be skeptical if someone thanks you for a pledge you don't remember making. If you have any doubt whether you've made a pledge or previously contributed, check your records. Be on the alert for invoices claiming you've made a pledge when you know you haven't. Some unscrupulous solicitors use this approach to get your money.
• Ask how your donation will be distributed. How much will go to the program you want to support, and how much will cover the charity's administrative costs? If a professional fund-raiser is used, ask how much it will keep.
• Refuse high pressure appeals. Legitimate fund-raisers won't push you to give on the spot.
• Be wary of charities offering to send a courier to collect your donation immediately.
• Consider the costs. When buying merchandise or tickets for special events, or when receiving free goods in exchange for giving, remember that these items cost money and generally are paid for out of your contribution. Although this can be an effective fund-raising tool, less money may be available for the charity.
• Be wary of guaranteed sweepstakes winnings in exchange for a contribution. You never have to donate anything to be eligible to win.
• Avoid cash gifts that can be lost or stolen. For security and tax record purposes, it's best to pay by check. Use the official full name of the charity Ñ not initials Ñ on your check. Avoid solicitors who want to send a courier or use an overnight delivery service to pick up your donation.

Charity Check-Up
Many charities use your donations wisely. Others may spend much of your contribution on administrative expenses or more fund-raising efforts. Some may misrepresent their fund-raising intentions or solicit for phony causes.

Before you open your checkbook, check out the charity you're considering with these organizations:

Department of Business Regulation
Charities Section
233 Richmond Street
Providence, RI 02903
(401) 222-3048

Philanthropic Advisory Service
Council of Better Business Bureaus
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203-1838
(703) 276-0100

National Charities Information Bureau
19 Union Square West, 6th Floor
New York, NY 10003-3395
(212) 929-6300

American Institute of Philanthropy
4905 Del Ray Avenue, Suite 300
Bethesda, MD 20814
(301) 913-5200

If the charity seeking your donation is not listed or rated, follow the precautions listed under Charity Checklist to help you determine whether an organization deserves your donation dollars.

For Complaints and More Information
If you believe an organization may not be operating for charitable purposes or is making misleading solicitations, contact the Department of Business Regulation or the Department of Attorney General Consumer Protection Unit.

You also may file a complaint with the Federal Trade Commission. Write: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC cannot intervene in individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission.

In addition, you can contact the National Fraud Information Center (NFIC), a project of the National Consumers League. NFIC operates a consumer hotline to provide service and assistance in filing complaints against fraudulent businesses. NFIC helps the FTC and state Attorneys General track and identify fraud operators by entering complaints into a computerized database. You can reach NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday.

The FTC publishes a series of free brochures on a variety of consumer issues. You can request a copy of Best Sellers, a complete list of FTC publications, at: Public Reference, Federal Trade Commission, Washington, D.C. 20580; (202) 326-2222. TDD: (202) 326-2502.

Know Your Consumer Rights

REFUND RIGHTS

The old business adage that "the customer is always right" does not always apply. These days, the best form of protection for retail shoppers is to know their rights and responsibilities before they buy.

When you shop for products at retail stores in Rhode Island, be sure to look for the store's "posted" refund policy. Rhode Island law says that retail stores must post their refund policies in conspicuous places such as at the store entrance, the cash register, or at the place in the store where the item is actually located. Keep in mind that the law does not say what the policies have to be. This decision is left to individual stores but their policies, whatever they are, must be posted. Unless the posted policy clearly specifies what the refund policy is, consumers may return an unused item within ten (10) business days of purchase for a refund, provided that the item is accompanied by a sales slip. Failure to post refund policies is itself a violation of Rhode Island law.

A number of items are not covered, in any case, by this refund law. It does not apply, for example, to the sale of books, magazines or other publications. The sale of food, drink and other perishable items is also not covered. Merchandise which is substantially custom-made or customfinished is exempt too. Equally, you cannot return items sold "as is" for a refund. Lastly, items presently prohibited for refund, return or exchange by a retailer by federal or state law or any rule or regulation promulgated by any state agency are not subject to return by a consumer.

LAY AWAY SALES RIGHTS

You may find it convenient to purchase an item and pay for it on the installment plan. If you buy an item on a lay away plan in a Rhode Island store, you have certain consumer rights which you should know about. Under Rhode Island law, "lay away sales" are defined as "any sale of goods in which the goods are offered for sale to the public on terms which permit periodic payment for the goods, and with respect to which delivery is deferred until completion of payment of the entire purchase price."

Under the law, businesses must:

• Clearly disclose the store's lay away policy.
• Lay away the same goods or exact duplicates of the goods specified in the lay away agreement.
• Specify period of time during which particular goods can be placed on lay away.
• Deliver identical merchandise unless otherwise agreed in writing beforehand.
• Provide receipts for all payments made and indicate amount due.
• Provide the buyer with a written agreement allowing for cancellation within ten (10) business days of purchase; after ten (10) business day, may retain no more than ten percent (10%) of the total payments made.
• Return down payments within 30 days of cancellation.
  

PRIVACY RIGHTS: PROTECT YOUR PERSONAL INFORMATION

As a sensible person, you would not give the keys to your home, your car, or your safe deposit box at the bank to a stranger. In today's increasingly complex world, it is equally inappropriate to give certain kinds of "personal information" to somebody you don't know. Your social security number, checking or savings account numbers, and your credit card numbers are as important and valuable to you as your house key, car key, and your safe deposit box key. These numbers provide the "keys" to much private personal and financial information about you which ought to be nobody's business but your own.

You can safeguard your privacy and your assets by doing the following:

• Never give out your social security number to an unauthorized person. Some government agencies, banks and healthcare providers may need this information for record keeping purposes or to provide you with services. Otherwise, don't give it out even though the request might seem "innocent" or "reasonable."
• Never give out your checking or savings account number (including your PIN (Personal Identification Number)) in person or over the telephone, to a person you don't know who may request them for "identification" or some other purpose. With these numbers in their possession, "crooks" don't need your signature or written authorization to withdraw money from your accounts.
• Never give your credit card number(s) out in person or over the telephone to somebody you don't know. This also includes partial information such as a card's expiration date or your mother's "maiden name" which a crook might request for "verification purposes." Con artists don't need anything more than your credit card numbers to make unauthorized purchases using your name and your credit identity. We all pay for such fraud through higher annual fees and other maintenance charges.

CANCELLATION RIGHTS: DOOR-TO-DOOR SALES

No doubt you have been visited in your own home, at one time or another, by someone selling magazines in order to pay their way through college or you may purchase an item from a business that has temporarily rented space to sell its products. You may wonder just what your "rights" and "responsibilities" as a consumer are in such door-to-door sales. The "Door-to-Door Sales Act" protects you when you make the purchase at home or at the temporary business location. Here are some of its main points:

• The term "door-to-door sales" includes the purchase of good or services, worth more than $25.00, whether you buy them at home or at a location other than the seller's permanent business location.
• The seller must give you a copy of the sales agreement which must contain an easy-to-read notice of your cancellation rights and how to exercise them.
• You have the right to cancel a door-to-door sales agreement within three (3) business days of the time you sign it, provided that during this period of time you send a written cancellation notice to the seller by registered or certified mail.
• If you exercise your right to cancel the seller must return your purchase price (less a maximum of $5.00 cancellation fee) within 20 business days.
• If you cancel, you may keep the goods until the seller refunds your money, but you must take good care of them in the meantime. The seller must pick up goods at your home or pay the cost of their return.

Mail Call

PYRAMID SCHEMES

What is a pyramid scheme?

Pyramid schemes are illegal scams in which large numbers of people at the bottom of the pyramid pay money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from payments of others who might join later.

Things you should know about pyramid schemes:

1. They are losers. Pyramiding is based on simple mathematics: Many losers pay a few winners.
2. They are fraudulent. Participants in a pyramid scheme are, consciously or unconsciously, deceiving those they recruit. Few would pay to join if the diminishing odds were explained to them.
3. They are illegal. There is a real risk that a pyramid operation will be closed down by the officials and the participants subject to fines and possible arrest.

Where to go for help:
For help in evaluating a company, contact the Direct Selling Association at:
Direct Selling Association
1776 K Street, NW
Suite 600
Washington, D.C. 20006
(202) 293-5760

or your local Better Business Bureau.

PRIZE PROMOTIONS

"Congratulations - It's Your Lucky Day!"

If you receive a letter with a message like this, be skeptical about the value of these "fabulous" prizes. They may not be worth collecting. Scam artists often use the promise of a valuable "prize" or "award" to entice consumers to buy vitamins, cosmetics, or other merchandise or services, or to contribute to bogus charities. They falsely describe the prize. Don't be surprised if the stereo system might be a plastic toy that fits in your hand, or if a clock is made of cardboard or plastic. The diamond is probably the size of a pinhead.

How to Protect Yourself:
The next time you get a "personal" letter telling you it's your "lucky day", keep these points in mind:

• Some contest promoters use names that resemble official organizations, such as the lottery or a parcel delivery service.
• Read the letter carefully, including the fine print. In some cases, the letter may tell you the cash value of each prize.
• You also may be required to pay a handling charge that is equivalent to the value of your prize. Remember, free is free. If you have to pay, it's not a prize.
• Before you send a check to a contest promotion company, think twice. If a company urges you to use an overnight delivery or courier service, beware!

If you have a complaint:
Contact the Department of Attorney General, Consumer Protection Unit or the Better Business Bureau at the following:

Department of Attorney General
Consumer Protection Unit
150 South Main Street
Providence, RI 02903
(401) 274-4400

R.I. Better Business Bureau
120 Lavan Street
Warwick, RI 02888
785-1212 (inquiries)
785-1213 (complaints)

Telemarketing(Tips from the F.T.C)

NEW REGULATION TO COMBAT TELEMARKETING FRAUD

Rhode Island has long had a law called the Telephone Sales Solicitation Act which governs telephone sales calls made within or into the State of Rhode Island. Among other things, this law requires for-profit telephone sales businesses to register with the Department of Attorney General on an annual basis.

With the enactment of a new Federal Regulation called the "Telemarketing Sales Rule" there is additional help for consumers in dealing with various telemarketing problems including unwanted sales solicitations. The Rule covers most types of telemarketing calls to residential consumers, including calls to pitch goods and services, "sweepstakes," prize promotions and investment opportunities. It sets limits on the times when telemarketers may call consumers (8:00 A. M. to 9:00 P.M.) and prohibits misrepresentations. Here are some main points of the new Rule:

• Telemarketers must tell you it's a sales call and who's doing the selling before they make their pitch. If it's a prize promotion, they must tell you the odds of winning, any restrictions or conditions of receiving the prize, and that no purchase or payment is necessary to enter or to win. If you are asked to pay for a prize, hang up!
• Telemarketers must tell you the total cost of the products or services offered and any restrictions on getting or using them, or that a sale is final or nonrefundable before you pay. Telemarketers cannot lie to get you to pay, no matter what method of payment you use.
• Telemarketers need your express, verifiable authorization to withdraw money from your checking account.
• It is illegal for certain telemarketers to call you if you have asked not to be called.

If you have any doubts about a telemarketing offer, ask for written information and read it carefully before buying a product or service, or taking part in a promotion or contest.

900 NUMBERS - THE FEDERAL TRADE COMMISSION'S 900 NUMBER RULE

Before making a 900 number call, you need to know how much the call will cost, what you will get for your money, and what will happen if you have a billing dispute.

The Federal Trade Commission's 900 Number Rule took the guesswork out of these calls by requiring certain information in ads and preambles for 900 number services. You also have protections under the Federal Communication Commission's own 900 Number Rule that governs the practices of telephone companies.

900 Number Ads
All print, radio, and television advertisements for 900 number services must include:

• the total cost of the call if there's a flat fee;
• the per-minute rate if the call is charged by the minute, as well as any
• minimum charge. If the length of the program is known in advance, the ad* also must state the total cost of the complete program;
  
• the range of fees if there are different rates for different options.
• The ad also must state the initial cost of the call and any minimum charges;
• the cost of any other 900 number to which you may be transferred; and
• any other fees the service might charge.

This information can't be hidden in small print: The cost of the call must be next to the 900 number and printed in a size that's at least half the size of the 900 number. In a television ad, an audio cost disclosure must also be made.

What You Should Hear First
When you dial a 900 number that costs more than $2, you should hear an introductory message or "preamble." You can't be charged for this message. It must briefly describe the service, the name of the company providing the service, and the cost of the call. It also must state that anyone under age 18 needs parental permission to complete the call. Once this information is provided, you must be given three seconds to hang up without incurring a charge.

Exceptions to the Rule
The 900 Number Rule does not apply if you have a pre-existing contractual agreement with an information service. Be very careful about entering such an arrangement. If you do, your calls to the service - and resulting bills - will not be subject to the Rule's requirements.

The Rule also excludes calls charged to a credit card. However, the bills for such calls would be covered by the dispute resolution procedures of the Fair Credit Billing Act.

Billing Errors and Disputes
The 900 Number Rule has procedures for resolving billing disputes. Always check your telephone bill for 900 number charges. For each 900 call, your statement should include the date, time, and, for services that have per-minute rates, the length of the call. These charges must appear separately from local and long distance charges. Your statement also must include a local or toll-free number for questions about your pay-per-call charges.

Under FCC regulations, the phone company cannot disconnect your regular local or long-distance service if you don't pay a 900 number charge. However, you could be blocked from making future calls to 900 numbers if you don't pay legitimate 900 number charges.

If you find an error on your bill, follow the instructions on your statement. They will tell you who to call or write to dispute the charge. In most cases, it will be your local or long-distance telephone company, but it could be the 900 number company or an independent firm that provides billing services for that company.

You must notify the company listed on your bill within 60 days from the date the first statement containing the error was sent. The company must acknowledge your notice in writing within 40 days unless it has resolved the dispute by that time. Within two billing cycles, but no longer than 90 days, the company must:

• correct the billing error and notify you of the correction, or
• investigate the matter and either correct the error or explain the reason for not doing so.

A company cannot charge you to investigate or respond to a billing dispute. No one can try to collect the disputed charge from you - or report it to a credit bureau - until the company handling the dispute either has corrected the error or explained its reason for not doing so. Companies that don't comply with these rules lose their right to collect up to $50 of each disputed charge.

However, even if the 900 number charge is removed from your bill, the service provider might pursue the charge some other way, such as through a collection agency. If so, you have additional rights under the Fair Debt Collection Practices Act.

Sweepstakes and Federal Programs
The Rule also covers 900 number services that promote sweepstakes or offer information about government programs. For example, some services offer the chance to enter a sweepstakes and win a prize simply by dialing a 900 number and, in some cases, entering a code. The Rule requires ads for sweepstakes to state the odds of winning or how odds will be calculated.

In addition, the ad or preamble must tell you there's a free way to enter the sweepstakes, how to enter, or how to get that information. You shouldn't have to call - and incur a charge - to enter. This provision doesn't apply to contests where you have to demonstrate a skill, such as answer a question correctly.

Other 900 numbers provide information about federal programs even though they're not affiliated with a government agency. This could mislead some consumers. Under the Rule, the ad and preamble must state that such services are not authorized, endorsed, or approved by a federal agency.

Children
The Rule essentially prohibits companies from promoting 900 numbers to young children. Some companies have promoted 900 numbers to children, encouraging them to pick up the phone to talk to a cartoon character. Under the FTC 900 Number Rule, companies are prohibited from advertising or offering pay-per-call services to children under age 12, unless the services are truly educational in nature.

If ads are directed to young people under age 18, they must state that parental permission is required to make the call. Preambles for all 900 number services must contain that statement.

Toll-Free Numbers
The Rule generally prohibits:

• using 800, 888, or other toll-free numbers for pay-per-call services, unless you have a pre-existing agreement with the company or you charge the call to a credit card;
• connecting you directly from an 800, 888, or other toll-free number to a 900 number; and
• a collect call back if you have dialed an 800, 888, or other toll-free number.

FCC Rules on Collect Calls
Under FCC regulations, pay-per-call services can't make collect calls to you if the charge would be more than - or in addition to - the regular long distance charge for the call. Services that don't impose this additional charge can call collect. However, you can't be charged for the call unless you have clearly indicated that you'll accept the charge.

Tips for Avoiding 900 Number Problem s
Scams involving 900 numbers are constantly changing. To help protect yourself:

• Deal only with reputable companies. Some companies or organizations sponsor 900 number services for opinion surveys, information, entertainment or other services. Before you call a 900 number, be sure you understand the cost of the call and the nature of the information or service you'll receive.
• Think twice before calling a 900 number for a "free" gift. Television ads, postcards and telemarketers may urge you to call a 900 number to get a "free" prize. But you pay for the so-called free gift by making the 900 number call. The provider of the service usually makes money on a per-minute basis, so there's an incentive to keep you on the line.
• Don't confuse 900 numbers with 800 or 888 numbers. You pay for a 900 number call. The company pays for most 800, 888, or other toll-free number calls.
• Talk with your children. Make sure they understand they shouldn't call 900 numbers without your permission. You can have the phone company block 900 number calls from your phone. The FCC requires local phone companies to make blocking available - where technically feasible - for a "reasonable" fee. However, any subscriber with a new number can request free blocking within 60 days after service begins.

ARE YOU A TARGET OF TELEPHONE SCAMS?

If you're age 60 or older, you may be a special target for people who sell bogus products and services by phone.

It's easy enough to fall prey to their sales pitch. Telemarketing fraud is a multi-billion dollar business in the United States. Every year, thousands of consumers lose from a few dollars to their life savings to telephone con artists.

That's why the Federal Trade Commission (FTC) and the Rhode Island Department of Attorney General encourage you to be skeptical when you hear a phone solicitation and to be aware of the Telemarketing Sales Rule, a law that can help you protect yourself from abusive and deceptive telemarketers.

How Older People Become Victims of Telemarketing Fraud
Fraudulent telemarketers try to take advantage of older people on the theory that they may be more trusting and polite toward strangers. Older women living alone are special targets of these scam artists.

Here are some reasons older people become victims of telemarketing fraud:

• Often it's hard to know whether a sales call is legitimate. Telephone con artists are skilled at sounding believable--even when they're really telling lies.
• Sometimes telephone con artists reach you when you're feeling lonely. They may call day after day--until you think a friend, not a stranger, is trying to sell you something.
• Some telephone salespeople have an answer for everything. You may find it hard to get them off the phone -- even if theyre selling something you're not interested in. You don't want to be rude.
• You may be promised free gifts, prizes, or vacations--or the "investment of a lifetime"-- but only if you act "right away." It may sound like a really good deal. In fact, telephone con artists are only after your money. Don't give it to them.

Common Telephone Scams
Con artists never run out of scams. Have you heard any of these?

• Prize offers: You usually have to do something to get your "free" prize--attend a sales presentation, buy something, or give out a credit card number. The prizes generally are worthless or overpriced.
• Travel packages: "Free" or "low-cost" vacations can end up costing a bundle in hidden costs. Or, they may never happen. You may pay a high price for some part of the package -- like hotel or airfare. The total cost may run two to three times more than what youd expect to pay or what you were led to believe.
• Vitamins and other health products: The sales pitch also may include a prize offer. This is to entice you to pay hundreds of dollars for products that are worth very little.
• Investments: People lose millions of dollars to "get rich quick" schemes that promise high returns with little or no risk. These can include gemstones, rare coins, oil and gas leases, precious metals, art, and other "investment opportunities." As a rule, these are worthless.
• Charities: Con artists often label phony charities with names that sound like better-known, reputable organizations. They won't send you written information or wait for you to check them out with the Rhode Island Department of Business Regulation, Charities Section (401) 222-3048.
• Recovery scams: If you buy into any of the above scams, you're likely to be called again by someone promising to get your money back. Be careful not to lose more money in this common practice. Even law enforcement officials can't guarantee they'll recover your money.

Tip-Offs to Phone Fraud
Telephone con artists spend a lot of time polishing their "lines" to get you to buy. You may hear this:

• You must act "now"--or the offer won't be good.
• You've won a "free" gift, vacation, or prize--but you pay for "postage and handling" or other charges.
• You must send money, give a credit card or bank account number, or have a check picked up by courier--before you've had a chance to consider the offer carefully.
• You don't need to check out the company with anyone--including your family, lawyer, accountant, local Better Business Bureau, or consumer protection agency.
• You don't need any written information about their company or their references.
• You can't afford to miss this "high-profit, no-risk" offer.

If you hear these--or similar--"lines" from a telephone salesperson, just say "no thank you," and hang up the phone.

The Telemarketing Sales Rule
The FTC's Telemarketing Sales Rule requires telemarketers to make certain disclosures and prohibits certain misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines.

The Rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, "sweepstakes," and prize promotion and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail.

Keep this information near your telephone. It can help you determine if you're talking with a scam artist or a legitimate telemarketer.

• It's illegal for a telemarketer to call you if you've asked not to be called. If they call back, hang up and report them to your state Attorney General.
• Calling times are restricted to the hours between 8 a.m. and 9 p.m.
• Telemarketers must tell you its a sales call and who's doing the selling before they make their pitch. If it's a prize promotion, they must tell you that no purchase or payment is necessary to enter or win. If you're asked to pay for a prize, hang up. Free is free.
• It's illegal for telemarketers to misrepresent any information, including facts about their goods or services, earnings potential, profitability, risk or liquidity of an investment, or the nature of a prize in a prize-promotion scheme.
• Telemarketers must tell you the total cost of the products or services they're offering and any restrictions on getting or using them, or that a sale is final or non-refundable, before you pay. In a prize promotion, they must tell you the odds of winning, that no purchase or payment is necessary to win, and any restrictions or conditions of receiving the prize.
• It's illegal for a telemarketer to withdraw money from your checking account without your expressed, verifiable authorization.
• Telemarketers cannot lie to get you to pay, no matter what method of payment you use.
• You do not have to pay for credit repair, recovery room, or advance-fee loan/credit services until these services have been delivered. (Credit repair companies claim that, for a fee, they can change or erase accurate negative information from your credit report. Only time can erase such information. Recovery room operators contact people who have lost money to a previous telemarketing scam and promise that, for a fee or donation to a specified charity, they will recover your lost money, or the product or prize never received from a telemarketer. Advance-fee loans are offered by companies who claim they can guarantee you a loan for a fee, paid in advance. The fee may range from $100 to several hundred dollars.)

Exceptions to the Rule
While most types of telemarketing calls are covered by the Rule, there are exceptions. The Rule does not cover:

• Calls placed by consumers in response to general media advertising, except calls responding to ads for investment opportunities, credit repair services, recovery room services, or advance-fee loans.
• Calls placed by consumers in response to direct mail advertising that discloses all the material information required by the Rule, except calls responding to ads for investment opportunities, prize promotions, credit repair services, recovery room services, or advance-fee loans.
• Catalog sales.
• Calls initiated by the consumer that are not made in response to any solicitation.
• Sales that are not completed, and payment or authorization for payment is not required, until there is a face-to-face sales presentation.
• Calls from one business to another unless nondurable office or cleaning supplies are being offered.
• Sales of pay-per-call services and sales of franchises. These are covered by other FTC rules.

What You Can Do To Protect Yourself
It's very difficult to get your money back if you've been cheated over the phone. Before you buy anything by telephone, remember:

• Don't buy from an unfamiliar company. Legitimate businesses understand that you want more information about their company and are happy to comply.
• Always ask for and wait until you receive written material about any offer or charity. If you get brochures about costly investments, ask someone whose financial advice you trust to review them.
• Always check out unfamiliar companies with the Better Business Bureau, the Rhode Island Attorney General or Attorney General in the state which the company is located, or the National Fraud Information Center. Unfortunately, not all bad businesses can be identified through these organizations.
• Always take your time making a decision.
• Legitimate companies won't pressure you to make a snap decision.
• It's never rude to wait and think about an offer. Be sure to talk over big investments offered by telephone salespeople with a trusted friend, family member, or financial advisor.
• Never respond to an offer you don't understand thoroughly.
• Never send money or give out your credit card or bank account number to unfamiliar companies.
• Be aware that any personal or financial information you provide may be sold to other companies.

MAGAZINE SUBSCRIPTION SCAMS

Beware of telephone sales pitches for "free," "prepaid," or "special" magazine subscription deals. An impulse purchase could leave you with years of monthly payments for magazines you may no longer want or could buy for less elsewhere. In some states, you are legally obligated to pay for a subscription once you verbally agree to it.

Of course, thousands of consumers buy magazine subscriptions from legitimate telemarketers every year. Yet, some unscrupulous salespeople trick consumers into paying hundreds of dollars for multi-year subscriptions. Here's how to tell the legitimate offers from bogus ones.

Deceptive Sales Tactics
Sales techniques vary. Question these approaches:

• A postcard that says nothing about magazine subscriptions but asks you to call a telephone number about a contest, prize, or sweepstakes entry. If you call, you may get information about contest prizes or drawing dates Ñ but it turns into a sales pitch for magazine subscriptions.
• Salespeople who don't identify themselves as such or who may not give you the name of their company. They may lead you to believe they represent major credit card companies or magazine publishers, or that they are calling for purposes other than selling subscriptions.
• Salespeople who encourage you to purchase without giving you total costs. For example, a salesperson may offer magazines for just a few dollars a week. This may sound like a bargain until you do the math. You could be paying hundreds of dollars for subscriptions that sell elsewhere for less.
• Salespeople who tell you magazines are "free" or "pre-paid" for you and that you'll only be charged a "processing fee." The fee may be more than the retail price of the magazine subscription.
• Companies that say they're "approved" or "regulated" by the federal, state, or local government. No government agency approves or endorses such operations.

If You're Called
Listen carefully to the sales pitch. If you're not interested, and you don't want to be called again, tell the caller to put you on the company's "do not call list." If the company continues to call, hang up. They're breaking the law.

If you are interested Ñ but busy, ask the salesperson to call you back when you have more time to focus on the offer. The salesperson may talk fast; ask questions to make sure you understand the deal.

Some salespeople may ask to tape the conversation, claiming it's for your protection. Later, they may use the tape to "prove" you agreed to buy the magazines, selected a payment method, and understood the terms of the agreement.

The best way to protect yourself from unscrupulous sales presentations is to be skeptical when someone tries to sell you a "bargain" or offers you something "free" over the phone. Ask questions about the products, the total costs involved, and your cancellation rights. If you're not comfortable with the answers, end the call.

The Telemarketing Sales Rule
Whle magazines are not covered under Rhode Island's Telemarketing Act, the FTC's Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines.

Some tips to keep in mind when you get a sales pitch:

• The caller must promptly identify the seller and the purpose of the call. If the offer comes with the promise of prizes or gifts, the sales presentation for the magazines must come first. If it doesn't, the caller is breaking the law. Hang up.
• If you make the call in response to a postcard promising prizes, gifts, or other awards, remember that you never have to pay for or buy anything to claim a prize, gift, or award.
• Feel free to ask for a written copy of the contract before you agree to buy. Read the contract carefully to make sure you understand what you'll receive, the cost for each magazine, and the cost of the whole package.
• Keep information about your bank accounts and credit cards to yourself Ñ unless you know who you're dealing with. You may get a letter or postcard soliciting your business, or telling you that you've won a prize or a contest. Often, this is a front for a scam. Instructions tell you to respond to the promoter with certain information. If you give your bank account or credit card number over the phone to a stranger for "qualification," "verification," or "computer purposes," it may be used to debit your account without your permission.
• If you ordered magazines over the phone once, you may be called again. Although you may think the call is about customer satisfaction, chances are the caller will try to sell you renewals and additional subscriptions. Listen carefully to the offers to make sure you understand the terms.

Canceling Subscriptions
Although there's no federal law governing cancellation of telephone agreements, certain state and local laws require telemarketers to provide a cancellation period. However, many magazine subscription companies do not honor verbal cancellations. To make sure your cancellation notice is honored, it's best to submit it in writing and within a certain time period.

If you want to cancel a subscription you've purchased over the phone, take the following steps:

• Watch your mail for the sales agreement; it may come in a plain or "junk mail" type envelope. Look for the cancellation terms; cancellation usually is allowed within three days of your receipt of the agreement. The cancellation notice may be hard to find; often it's attached to an inside page of multiple copies of the sales agreement.
• Sign the cancellation notice and return it to the proper address. That may be hard to find, because several addresses may be listed. Send the notice by certified or registered mail, so you have proof of your mailing date. If you can't send the notice by certified mail, make a photocopy of the signed and dated notice for your records.
• When you send the cancellation notice, contact your bank or credit card company to stop any unauthorized payments from your account or to dispute any charges or debits to your account.
• The company may tell you that your cancellation request was too late and that you must pay. Check with your state Attorney General to find out what cancellation rights you may have under state law.
• If the cancellation period expired and you paid in full, the company may not be required to refund your money. If you don't make proper payments on time, you could get dunning notices and calls from collection agencies, threats of legal action, or a bad credit rating.

Where To Go For Help
If you think you've been victimized by a magazine subscription scam, contact the Rhode Island Department of Attorney General, Consumer Protection Unit.

You also may file a complaint with the Federal Trade Commission. Write: Consumer Response Center, Federal Trade Commission, Washington, D.C. 20580. Although the FTC does not intervene in individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission.

In addition, you can contact the National Fraud Information Center (NFIC), a project of the National Consumers League. NFIC operates a consumer hotline to provide service and assistance in filing complaints against fraudulent businesses. NFIC helps the FTC and state Attorneys General track and identify fraud operators by entering complaints into a computerized database. You can reach NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday.

Telemarketing Travel Fraud

Have you ever been tempted to buy a bargain-priced travel package over the telephone? Be careful. You may get more than you bargained for. While some travel opportunities sold over the phone or offered through the mail are legitimate, many are scams that defraud consumers out of millions of dollars each month.

The scam starts when you receive a postcard or certificate that says: "Pack your bags! This certifies that you'll receive a world class Florida/Caribbean vacation offer for you and a friend."

The word "offer" often is a clue to hidden charges. The postcard or certificate tells you to call a phone number - usually toll-free - for details about the trip. When you call, you're given a sales pitch for a supposedly luxurious trip - one that you could pay dearly for.

The salesperson may ask for your credit card number to bill your account for the travel package. Once you pay, you receive the "package," which usually includes instructions for making trip reservation requests. Your request often must be accompanied by yet another fee. In addition, many offers require you to pay port charges, hotel taxes, and service fees.

See a pattern developing? New charges are being added every step of the way. You may never get your "bargain" trip because your reservations may not be confirmed or you must comply with hard-to-meet hidden or expensive "conditions."

Telemarketing travel scams usually originate out of "boiler rooms." Skilled salespeople, often with years of experience selling dubious products and services over the phone, pitch travel packages that may sound legitimate, but often are not. These pitches usually include:

• Oral Misrepresentations. Particular schemes vary, but all fraudulent telemarketers promise you a "deal" they can't possibly deliver. Unfortunately, you won't know it until your money's gone.
• High Pressure/Time Pressure Tactics. Scam operators often say they need your commitment to buy immediately or that the offer won't be available much longer. They typically brush aside questions or concerns with vague answers or assurances.
• "Affordable" Offers. Unlike fraudulent telemarketers who try to persuade people to spend thousands of dollars on an investment scheme, fraudulent travel telemarketers usually pitch club membership or vacation offers in a lower price range. The offers sound reasonable and are designed to appeal to anyone who is looking for a get-away.
• Contradictory Follow-up Material. Some companies may agree to send you written confirmation of your deal. However, it usually bears little resemblance to the offer you accepted over the phone. The written materials often disclose additional terms, conditions, and costs.

How To Protect Yourself
Unpleasant surprises can ruin a vacation, especially when they cost money. That's why it pays to investigate a travel package before you buy. But it can be difficult to tell a legitimate sales pitch from a fraudulent one. Consider these travelers' advisories:

• Be wary of "great deals" and low-priced offers. Few legitimate businesses can afford to give away products and services of real value or substantially undercut other companies prices.
• Don't be pressured into buying. A good offer today usually will be a good offer tomorrow. Legitimate businesses don't expect you to make snap decisions.
• Ask detailed questions. Find out exactly what the price covers and what it doesn't. Ask about additional charges. Get the names of the hotels, airports, airlines, and restaurants included in your package. Consider contacting these businesses directly to verify arrangements. Ask about cancellation policies and refunds. If the salesperson can't give you detailed answers, walk away.

If you decide to buy, find out the name of the travel provider - the company that is getting your reservations and tickets. This company usually is not the telemarketer.

• Get all information in writing before you agree to buy. Once you receive the written information, make sure it reflects what you were told over the phone and the terms you agreed to.
• Don't give your credit card number or bank information over the phone unless you know the company. One easy way for a scam operator to close a deal is to get your credit card number and charge your account. Sometimes fraudulent telemarketers say they need the number for verification purposes only. Don't believe them.
• Don't send money by messenger or overnight mail. Some scam artists may ask you to send them a check or money order immediately. Others may offer to send a messenger to pick up your payment. If you pay with cash or a check, rather than a credit card, you lose your right to dispute fraudulent charges under the Fair Credit Billing Act.

If you charged your trip to a credit card, you may dispute the charges by writing to your credit card issuer at the address provided for billing disputes. If possible, do this as soon as you receive your statement. If not, you have up to 60 days after the bill's statement date to dispute the charge.

• Check out the company before you buy. Contact the organizations listed below to see if any complaints have been lodged against the travel firm or the travel provider. Be aware that fraudulent businesses often change their names to avoid detection.
• If in doubt, say "no." You may have doubts - even if an offer sounds legitimate. In that case, trust your instinct. It's much less risky to turn down the offer and hang up the phone.

Where to Complain
Several organizations can provide additional information and help you with complaints.

• Rhode Island Department of the Attorney General - Consumer Protection Unit.
• The American Society of Travel Agents, Consumer Affairs, at 1101 King Street, Alexandria, Virginia 22314, may be able to mediate your dispute with an ASTA member.
• The National Fraud Information Center (NFIC), a project of the National Consumers League, is a nonprofit organization that operates a consumer hotline to provide services and help for consumers who may want to file complaints. NFIC sends appropriate information to the Federal Trade Commission/National Association of Attorneys General Fraud Database. Contact NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday.
• The Federal Trade Commission, Correspondence Branch, Washington, D.C. 20580. Although the FTC cannot intervene in individual disputes, the information you provide may indicate a pattern of possible law violations requiring action by the Commission.

CONSUMER PROTECTION STRAIGHT TALK ABOUT TELEMARKETING

You know the routine: you sit down to dinner and the phone rings. You answer it. There's a pleasant voice trying to sell you something. If you're tempted by the offer, you'd better get the facts before a potential fraud gets you.

Although most phone sales pitches are made on behalf of legitimate organizations offering bona fide products and services, many sales calls are frauds. Consumers lose more than $40 billion a year to telemarketing fraud. That's why the Federal Trade Commission (FTC) encourages you to be skeptical when you hear a phone solicitation and to be aware of a new law--the Telemarketing Sales Rule--that can help you protect yourself from abusive and deceptive telemarketers.

How Telemarketing Scams Work
The heart of a fraudulent telemarketing operation is usually a "boiler room," a rented space with desks, telephones, and experienced sales people who talk to hundreds of people across the country every day. Telephone fraud knows no race, ethnic, gender, age, education or income barriers. Anyone with a phone can be victimized by telemarketing scam artists.

Fraudulent telemarketers and sellers may reach you in several ways, but the telephone always plays an important role.

Cold Calls. You may get a call from a stranger who got your number from a telephone directory, mailing list, or "sucker list." The latter refers to lists of consumers who have lost money through fraudulent prize promotions or merchandise sales. These lists contain names, addresses, phone numbers, and other information, such as how much money was spent by people who have responded to telemarketing solicitations. "Sucker lists" are bought and sold by unscrupulous promoters. They are invaluable to scam artists who know that consumers who have been deceived once are vulnerable to additional scams.

Direct Mail. You may get a letter or postcard saying youve won a prize or a contest. This often is a front for a scam. Instructions tell you to respond to the promoter with certain information. If you do, you'll be called by a salesperson who may use persuasive sales pitches, scare tactics, and exaggerated claims to deceive you and take your money.

Broadcast and Print Advertisements. In some cases, you may make the telephone call in response to a television, newspaper or magazine advertisement, or a direct mail solicitation. The fact that you make the call doesn't mean the business is legitimate or that you should be less cautious about buying or investing on the phone.

The Telemarketing Sales Rule
The FTC's Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives the Department of Attorney General the authority to prosecute fraudulent telemarketers who operate across state lines.

The Rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, "sweepstakes," and prize promotion and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail.

Keep this information near your telephone. It can help you determine if youre talking with a legitimate telemarketer or a scam artist.

• It's illegal for a telemarketer to call you if you've asked not to be called. If they call back, hang up and report them to your state Attorney General.

Calling times are restricted to the hours between 8 a.m. and 9 p.m.

• Telemarketers must tell you it's a sales call and who's doing the selling before they make their pitch. If it's a prize promotion, they must tell you that no purchase or payment is necessary to enter or win. If you're asked to pay for a prize, hang up. Free is free.
  

It's illegal for telemarketers to misrepresent any information, including facts about their goods or services, earnings potential, profitability, risk or liquidity of an investment, or the nature of a prize in a prize-promotion scheme.

• Telemarketers must tell you the total cost of the products or services offered and any restrictions on getting or using them, or that a sale is final or non-refundable, before you pay. In a prize promotion, they must tell you the odds of winning, that no purchase or payment is necessary to win, and any restrictions or conditions of receiving the prize.
• Its illegal for a telemarketer to withdraw money from your checking account without your express, verifiable authorization.
• Telemarketers cannot lie to get you to pay, no matter what method of payment you use.
• You do not have to pay for credit repair, recovery room, or advance-fee loan/credit services until these services have been delivered. (Credit repair companies claim that, for a fee, they can change or erase accurate negative information from your credit report. Only time can erase such information. Recovery room operators contact people who have lost money to a previous telemarketing scam and promise that, for a fee or donation to a specified charity, they will recover your lost money, or the product or prize never received from a telemarketer. Advance-fee loans are offered by companies who claim they can guarantee you a loan for a fee paid in advance. The fee may range from $100 to several hundred dollars.)
• If you have the slightest doubt about a telephone offer, wait until you can get information in writing and check it out!

Expection to the Rule
Although most types of telemarketing calls are covered by the Rule, there are several exceptions. The Rule does not cover the following situations:

• Calls placed by consumers in response to general media advertising (except calls responding to ads for investment opportunities, credit repair services, recovery room services, or advance-fee loans).
• Calls placed by consumers in response to direct mail advertising that discloses all the material information required by the Rule (except calls responding to ads for investment opportunities, prize promotions, credit repair services, recovery room services, or advance-fee loans).
• Catalog sales.
• Calls that are initiated by the consumer that are not made in response to any solicitation.

Sales that are not completed, and payment or authorization for payment is not required, until there is a face-to-face sales presentation.

• Calls from one business to another unless nondurable office or cleaning supplies are being offered.
• Sales of pay-per-call services and sales of franchises. These are covered by other FTC rules.

Defensive Move
In addition to knowing about the Telemarketing Sales Rule, its a good idea to keep the following tips in mind whenever you hear a phone solicitation:

• Resist high pressure sales tactics. Legitimate businesses respect the fact that you're not interested.
• Take your time. Ask for written information about the product, service, investment opportunity, or charity thats the subject of the call.
• Before you respond to a phone solicitation, talk to a friend, family member, or financial advisor. Your financial investments may have consequences for people you care about.
• Check out testimonials to make sure they're genuine -- not statements that have been bought or paid for. * Don't send money -- cash, check, or money order -- by courier, overnight delivery, or wire to anyone who insists on immediate payment.
• Keep information about your bank accounts and credit cards to yourself -- unless you know who youre dealing with.
• Before you pay, check out the company with the Department of Attorney General, Consumer Protection Unit.

To Report a Scam
Fight telephone fraud. Report telephone scam artists to the Rhode Island Department of the Attorney General, Consumer Protection Uint.. The Telemarketing Sales Rule gives the Attorney General the power to prosecute fraudulent tele-marketers who operate across state lines. You also may call the National Fraud Information Center (NFIC) at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday. NFIC is a private, non-profit organization that operates a consumer hotline to provide services and assistance in filing complaints. NFIC also forwards appropriate complaints to the Federal Trade Commission for entry on its telemarketing fraud database.

In addition, you may want to file a complaint with the FTC by writing to:

Consumer Response Center
Federal Trade Commission
Washington, D.C. 20580

Although the FTC generally does not intervene in individual disputes, the information you provide may help indicate a pattern of possible law violations requiring action by the Commission.

Utilities

Have You Been Slammed?
If your telephone long distance carrier has been switched without your authorization...you are the victim of a practice known as "slamming". In fact, it is the number one telephone related complaint received by the Federal Communications Commission (FCC).

Some Of The Latest "Slamming" Methods

• Contests, drawings and sweepstakes forms. Read the fine print carefully before you submit entry forms. Be especially wary if the form says you're required to give your phone number and signature. Doing so may authorize a change in your long distance company.
• Rebates and checks. Again, read the fine print to find out what outcome will result from endorsing the check. If you can't make out the fine print because it's too small, unclear or unreadable, be suspicious. Don't cash the check.
• Marketing techniques. A telemarketer from another long distance service may call to ask you to consider switching, promising bargains like a certain amount of free long distance service. Even though you may decline, or ask only for information, you may discover that the marketer has gone ahead and made the switch before getting your go-ahead.

How To Avoid Being Slammed

• Call your local telephone company and tell them that you do not want your long distance service changed unless you send them written authorization.
• Read your telephone bill each month. Check to make sure that the long distance carrier you selected is still handling your calls.
• Before giving out personal information about yourself -- such as your home telephone number or information about your present carrier -- find out who will see that information and how it will be used. Read the small print before signing any form. Get the name and telephone number of any telephone service promoter calling you.
• Ask any solicitor to send you information in writing and review it carefully before you switch over to it.

If You Discover You've Been Slammed

• Contact your local carrier right away and let them know your long distance carrier was switched without your authorization. You should not be billed for the cost to switch you back.
• File a complaint with the Federal Communications Commission, which tracks the complaints for possible future regulatory action. Send your complaint to FCC, Consumer Protection Branch, Mail Stop 1600A2, Washington, DC 20006.
• File a complaint with the Public Utilities Commission at 100 Orange Street, Providence, RI 02903; (401) 222-2443.
• Contact the Rhode Island Department of Attorney General, Consumer Protection Unit at 150 South Main Street, Providence, RI 02903; (401) 274-4400.