Telemarketing Fraud + Laws, Charges & Statute of Limitations

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Phone & telemarketing fraud is any form of deception or misrepresentation intended to result in material gain and executed over the phone or by way of telemarketing. Telemarketing fraud is one of the fastest growing categories of federal crime in the United States and is estimated to be the source of tens of millions of dollars in losses each and every year. Under a typical telemarketing scheme, fraudsters propose to offer an apparently useful product or service that they fail to deliver. They may sign up their victims for recurring costs which the victims have difficulty stopping and cannot recover. They may frequently change names, states, or other information in order to dodge complaints and avoid refunds.

Phone & Telemarketing Fraud Laws

Federal phone & telemarketing fraud laws can be somewhat different from equivalent laws in the states. State laws can punish individuals who engaged in telemarketing fraud entirely within a single state jurisdiction. Federal laws are invoked in cross-state cases. Because telemarketing fraud entails violations of the guidelines set forth by the Federal Trade Commission and may also include violations of Federal Communication Commission standards, a large percentage of telemarketing fraud cases ultimately fall under federal jurisdiction.

Phone & Telemarketing Fraud Crimes & Charges

Federal phone & telemarketing fraud laws are distinct from other types of fraud because of the use of the telephone as the major tool of fraud. Generally speaking, any scheme that involves telephone communication can be considered phone fraud. Some of the following schemes are among those that are most frequently prosecuted under federal jurisdiction:

  • Advanced Fee Scams: In these scams, victims are promised future gain if they provide a large amount of money “up front.” These scams are often frequently used by mail and over the internet, and have become known as the “Nigerian Prince Scam” when they are encountered online. The victim is encouraged to provide more and more money, ostensibly to cover unexpected costs and fees, and abandoned when they express concern about their purported reward.
  • Pyramid Schemes: In pyramid schemes, individuals pay in a certain sum of money and are promised an exponential return based on the investment of future participants. Some individuals may profit from pyramid schemes, but the vast majority of those who join later on in the scheme will not.
  • False Representation: Although all fraud may be said to involve false representation of some kind, a certain type of telemarketing fraud focuses on the use of false information from legitimate businesses to persuade victims to agree to make payments or restitution. In many cases, this involves convincing victims that they were overpaid for some service.

Phone & Telemarketing Fraud Punishment

Telemarketing fraud punishment can include substantial fines and jail time. Penalties of more than $100,000 are possible, as well as prison terms of several years.

Phone & Telemarketing Fraud Sentencing Guidelines

When determining the sentencing for telephone fraud, authorities use a complex point system that takes into account the total amount lost by the victims or gained by the perpetrator, the number of victims, the perpetrator’s criminal history, and whether the victims were especially vulnerable to fraud, such as elders.

Phone & Telemarketing Fraud Statute of Limitations

As outlined in federal statute 18 USC 3282, the government is not permitted to prosecute, try, or penalize a defendant for any noncapital offense unless the defendant is indicted or information in the case is instituted within five years of the commission of the offense.

Phone & Telemarketing Fraud Cases

Phone and telemarketing fraud cases have the potential to be some of the most serious cases of fraud in the United States. They typically target elders and others who have limited financial and legal resources. This helps criminals to ensure that it will be difficult to trace, track down, and ultimately prosecute their operations. Many telemarketing fraud operations use agents from other countries or base their operations internationally whole or in part. Some major telemarketing and phone fraud scams have included:

  • In 2013, the “Jamaican Phone Fraud” scam reached epidemic proportions in some areas of the United States. This scam entailed callers, whose operations mostly originated from Jamaica, using deception and coercion to defraud seniors out of up to tens of thousands of dollars per person (Homeland Security Investigations)
  • Fraudsters used telemarketing methods to secure an alleged $25 million throughout 2010 by calling victims nationwide to offer bogus credit reduction products and services. The alleged activities were based in the Philippines. (Department of Justice)

Phone & Telemarketing Fraud Quick Links & References

Telemarketing Fraud Laws by State

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming