FIGHT BACK! BY DAVID HOROWITZ

A New Twist on an Old Scam

I've been writing columns for years about various telemarketing scams -- phony sweepstakes, sure-fire investments, bogus charities and high-pressure product sales. Now, these boiler-room operators have come up with a new one called "recovery rooms." These callers prey on people who've been ripped off by telemarketing scams. The victim receives a call from someone posing as a "recovery agency" or legal-aid organization. The operator says something like, "We understand you were the victim of a telemarketing fraud, and we'd like to help. We can help you get your money back." There's a fee for this service, of course. Usually around $500. You'd think people who had been ripped off once would be leery about a come-on like that. But the caller sounds so sincere, and the victims are desperate. They've already been told by police that there's probably no chance they will ever get their money back. Maybe this company can do something the police can't do. These operators work along a fine line between what's legal and what's fraud. If they guarantee a return, then that's misrepresentation. But if they only promise to "help," then they usually can't be prosecuted -- even if the victim ends up getting nothing back, which is usually the case. Ironically, many of the people working recovery-room scams are the same ones who ripped off the victims in the first place. They leave one boiler-room operation for another, taking their lead sheets of names and phone numbers with them. Those same victims from the same lists get hit again with the new pitch. Authorities in Nevada recently filed legal action against two Las Vegas recovery rooms. But investigators warn there are dozens of others still in operation all over the country.

Boiler-room operators move around and change names so quickly, it's often impossible to track them from one scam to the next. So, the Federal Trade Commission has established a nationwide computer database on telemarketing fraud. It takes information from fraud investigations all over the country -- company names, suspects, scams, sales pitches -- and then searches that data for patterns and similarities. The FTC is now training state and local investigators on how to use the database to identify boiler-room operators in their areas. That lets them move in and shut them down more quickly. They can also circulate bulletins warning potential victims about a new scam, like the recovery rooms above. The FTC is also going after companies that process credit-card transactions for boiler rooms. Late last year, the commission sued the Electronic Clearing House Inc. of Las Vegas, which processed $12 million worth of credit-card charges for telemarketers, including four companies charged by the government with consumer fraud. Under the terms of the settlement, the clearing house agreed to stop handling charges from telemarketers who use prize promotions and to investigate solicitors whose transactions exceed $30,000 a month. FTC officials say the case is a warning to credit-charge processors all over the country. They better watch whom they do business with, or they'll find themselves in federal court, right along with the telemarketers. COPYRIGHT CREATORS SYNDICATE, INC.