Phone Seller Wants Quick Electronic Payment? No!
Thanks to a change in federal rules, beginning this month fraudulent telemarketers have fewer ways to take money away from your wallet or bank account, and consumers have greater protections.
The new restrictions target telemarketing fraud by banning certain payment methods that don’t carry the types of protections for consumers that are guaranteed with credit cards and debit cards. These payment methods are often used by scammers and shady telemarketers who don’t conduct business aboveboard.
Under the new changes to the Telemarketing Sales Rule (TSR), telemarketers are prohibited from accepting funds through these payment methods:
- Wire Transfer: This is a “cash-to-cash” money transfer, through services such as Western Union and MoneyGram. When a consumer pays for a wire transfer, the funds are loaded into a worldwide system and picked up by the recipient as cash. Once the transaction is complete, the money is gone—just like cash. Criminals try to convince their victims to wire money to a stranger, and the money often ends up in a foreign country.
- Reloadable Prepaid Card: This is commonly referred to as a prepaid money card or prepaid cash card. A consumer generally pays a service fee to obtain and activate a one-time use or reloadable card, and then load funds onto the account. Criminals seek a card number and Personal Identification Number (PIN) from consumers, and then transfer the funds out of the consumers’ prepaid card accounts. While these cards seem similar to credit cards, they do not carry the same protections--they are much more like cash.
- Remotely Created Check: A remotely created check (RCC) is also known as a demand draft. With a demand draft, a consumer is supposed to give a merchant permission to withdraw funds directly from his or her checking account without a signature. In other words, it’s an approved payment transfer from one bank account to another. A criminal may seek to trick a victim into providing account information over the telephone or the Internet.
- Remotely Created Payment Order: A remotely created payment order (RCPO), also called an electronic check, or eCheck, is an electronic version of a remotely created check. It poses many of the same risks posed by remotely created checks when scammers are involved.
The rules are designed to reduce the options for scammers to arrange counter-to-counter cash transfers or directly access bank accounts for withdrawals.
The rules don’t change how consumers may use these payments for legitimate, routine transactions, such as consumers authorizing online payments from their bank accounts. These payment methods are not what reputable telemarketers use to do business.
Criminals and dishonest sellers who don’t play by the rules will come up with any kind of story to convince you over the phone to pay them. And they may try to rush or even threaten you.
- Buy only from reputable sellers that you are familiar with.
- Do not rush into anything. Take the time you need to consider it, ask for written information, do research, and think about asking for advice from someone you trust.
- Callers can easily manipulate your caller-ID display to block your display or show any phone number or listing they want—even your own name and number. Those same callers may provide false information about their names, who they represent, and why they are calling.
- Be wary of a caller who seeks payment through any of the methods listed above (such as a wire transfer, prepaid card, etc.).
- Avoid paying by gift card. No legitimate business will ask you to pay in gift cards.
- If you purchase something by phone, a credit card offers you the best protections and enables you to dispute fraudulent charges.