Telemarketing Fraud occurs when consumers are victims of various deceptive schemes over the phone. These schemes take the form of unsolicited phone calls promising cash and prize winnings which are fraudulent or non-existent.
To be found guilty of telemarketing fraud, a defendant must have perpetuated: 1) a scheme to defraud that includes a material deception; 2) with the intent to defraud; 3) while using a telephone in furtherance of that scheme; 4) that did result or would have resulted in the loss of money or property or the deprivation of honest services.
The first element essentially describes a scheme where the consumer is deprived of something of value by trick. The fact that the scheme was not successful will not negate telemarketing fraud. Some of the forms of telemarketing fraud are charity schemes, prize promotion schemes, requiring advanced payment and failing to deliver promised goods.
There are two defenses to telemarketing fraud. 1) Good Faith and 2) Statute of Limitations. The good faith defense is raised when a defendant believes that the alleged “fraudulent” acts were true when made. This defense negates the intent element. The Statute of Limitations defense is different in every jurisdiction and may be raised if the statute of limitations for being charged with telemarketing fraud has expired.
The penalties for telemarketing fraud include imprisonment, fines or both. The length of the sentencing and amount of fines is dependent on the amount defrauded and who the victims are. Since 1998, Congress has amended the law to include enhanced federal penalties for conviction of federal telemarketing fraud that targets the elderly. These penalties also include significant prison time and restitution.