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Telemarketing Fraud in Texas: Fraud by Phone

Criminal Law Blog by The Law Office of Greg Tsioros

Telemarketing Fraud in Texas: Fraud by Phone

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Telemarketing Fraud Laws in Texas

For many Texas residents, telemarketing calls are a common annoyance. Many companies use telemarketing to sell products or advertise their services and many of us don’t give them a second thought. However, some unscrupulous individuals use telemarketing to engage in serious forms of fraud.

Telemarketing fraud can turn a simple phone call into a criminal action. Companies or individuals who perpetrate this kind of fraud can face serious charges and even jail time. Texas prosecutors work hard to punish these schemes to discourage scammers from attempting them. Learning how fraud schemes are investigated and prosecuted in Texas can help you avoid becoming a victim of a scam.


What Is Telemarketing Fraud?

In legal terms, fraud is a crime involving the use of deceit or trickery to obtain money, goods or services from unsuspecting victims. For example, a person who tries to cash a check which belongs to another person may be guilty of fraud because they used deceit to convince a bank teller that they are the check owner.

Telemarketing fraud takes these schemes to the level of deceptive phone calls. In many cases, these schemes target elderly people who may have disposable income but may be more likely to trust a deceitful stranger who gives them a phone call.

A common example of telemarketing fraud is the “advance fee” scam. In this scheme, a person posing as a telemarketer will call an individual and tell them that they are entitled to a large sum of money. As part of the scam, the telemarketer will inform the victim that they must send some money upfront, an “advance fee,” to cover the administrative costs of the payment. Of course, in reality, the scammer will never send this fake sum of money and will simply collect the fee from the victim.

This action is illegal in Texas and can lead to investigation and prosecution.

Common Telemarketing Scams

In addition to the “advance fee” scheme, there are many other types of telemarketing fraud. Although these schemes may vary in their specific details, they all tend to follow a similar pattern:

  • A person is contacted and told that they must turn over some money or goods
  • The telemarketer may use threats or promises of wealth to convince the person receiving the call
  • The telemarketer will claim to be a representative of a company, government agency or foreign agency

Some common scams include:

  • Ponzi scheme – Telemarketers will pretend to be financial investors, promising huge returns that are actually paid out of funds obtained through fraud
  • Pyramid scheme – Telemarketers will promise people that their investment will enable them to make more money, although few ever actually make a profit
  • Collection scheme – Telemarketers will tell people that they owe large sums of money to a bank or the government even though no such debts exist

No matter what form a telemarketing scam may take, the government devotes time and resources to locating these schemes and punishing those responsible.

Texas Telemarketing Fraud Laws

In Texas, a telemarketing call is defined as a phone call in which the call recipient is told that they may receive money, that they can obtain credit or that they can purchase an item or a service.

If a telemarketer calls a person on the state “Do Not Call” list, they may face penalties. The following acts are prohibited under Texas law:

  • Calling a person on the “Do Not Call” list more than 60 days after they have registered on the list
  • Sending faxes to people more than 24 hours after they have been instructed not to contact an individual
  • Intentionally obscuring Caller ID information

As with all types of fraud in Texas, it is illegal to use false information to obtain money or goods from unsuspecting people. Whether it is a bogus investment opportunity or collections calls regarding fake debts, telemarketing fraud can be punished harshly at both the state and federal level.

Telemarketing Fraud Punishments

Section 304.001 of the Texas Business and Commerce Code lists the punishments for telemarketing fraud offenses. In most cases, these crimes are investigated after a person who suspects that they are the victim of a scam files a formal complaint.

Potential telemarketing schemes are typically investigated by the Texas state commission after they receive one or more complaints. To investigate the complaints, the commission may contact the person or entity which placed the calls. If the investigation turns up signs of fraud, charges may be filed.

In Texas, a person or entity that is found guilty of telemarketing fraud may be fined $1000 for each violation count. They may also be held financially responsible for any court fees and attorney fees that are incurred during the investigation.

In some cases, telemarketing fraud may be investigated by the federal government on charges of mail fraud or wire fraud. Federal charges can range from fines to the revocation of a business license and even federal prison time.

No matter what form a telemarketing scam may take, people can take action against these fraudsters by filing a formal complaint with the office of the Texas Attorney General of the Federal Trade Commission.

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