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By Herb Weisbaum ConsumerMan
msnbc.com contributor
updated 1/28/2009 2:45:03 PM ET 2009-01-28T19:45:03

When someone calls you out of the blue and offers you free stuff – beware. If that caller asks to “verify” your bank account information – hang up! You’re talking to a con artist.

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The Federal Trade Commission says Suntasia Marketing of Largo, Fla. used this trick to deceive nearly a million people out of approximately $172 million between 1999 and 2007.

Suntasia also did what is called negative option marketing. If the consumer said yes, and didn’t cancel within a specified amount of time, the company would debit the person’s checking account, using the number that was obtained through the deceptive sales pitch.

Two weeks ago, Suntasia settled fraud charges brought by the FTC.

A federal court judge ordered the company’s owners to stop their illegal actions and pay back more than $16 million to unhappy customers.

When asked to respond to the settlement, an attorney for two of the individuals in this case said "there was no admission of liability of admission or finding of wrongdoing." In his e-mail, attorney Jack Fernandez said the company believes its marketing parctices "have at all times been in full compliance with applicable laws" and it intends to resume business operations.

Complaints against Suntasia reached near-record numbers. The FTC collected more than 5,000 of them. How could so many people be duped? “Suntasia’s salespeople would represent that they were affiliated with the consumer’s bank,” explains Todd Kossow, one of the FTC lawyers who handled this case. “They would have the consumer believing that they already had their bank account number, when they didn’t.”

Nicole Jones of Seattle took the bait. She agreed to a discount travel club offer that would only cost $19.95 a month. “It didn’t sound half bad and there was a 14-day free trial period,” she says. “I figured that would give me time to look into it and see if it was something I wanted to do.” So she gave the caller her checking account number.

About 14 days later, the envelope arrived. Along with the travel club material, there was an unexpected membership for a time share in Florida. That time share offer had to be canceled within seven days.

Jones called to complain but was told the company could not be responsible for when the letter was delivered. Because she had not cancelled within the seven-day period, the company used her checking account number to make an electronic withdrawal for $149.

“They completely lied to me,” says Jones, who never got her money back.

The pitch was slick
The Suntasia telemarketers would always start their calls by offering some freebies in return for accepting a 14-day trial membership in a buying club or discount travel program.

Here is one of the scripts Suntasia salespeople used. It was introduced as evidence in court:

“My name is (your name), I’m a registered Agent calling on behalf of Agents Travel Network in regards to your banking account. As a valued customer we are going to send you $400 in airline savings vouchers and two free nights of hotel accommodations, just for you for accepting a 14-day free trial into our Agents Travel Network program.”

The salesperson went on to explain that after the free trial period, the charge was $19.95 a month “billed to your checking account,” plus a one-time activation fee of $40. “If you decide to cancel,” the script says, “just call the toll-free number in your package during the trial period, you’ll never be billed and there’s no further obligation.”

The FTC’s Kossow says this violates the federal Telemarketing Sales Rule which requires the salesperson to provide the cancelation number during the initial call.

The salesperson would then ask for the name of the person’s bank and the city and state where the account was opened. Armed with this information, it’s easy to find the bank’s nine-digit routing number.

Once he “verified” that routing number, he would ask the “customer” for the last set of numbers – the all-important account number. That was all Suntasia needed to make an electronic withdrawal from the person’s bank account.

But there’s more. Before getting off the line, the Suntasia salesperson would talk about two more “free-trial” offers, such as a time-share, buying club or long distance phone service. Again, if the person didn’t cancel within a certain time period, withdrawal from the checking account would be made. The buying club was $149 plus $9.95 a month. The long distance service was $49.95 a month.

"They tricked me"
Janis Gorton lived in Austin, Texas, when she got the call offering her a free one-week vacation and a calling card. “She made it sound like she already had my checking account information,” Gorton says. “So I confirmed the information for her and gave her more information. I know now I shouldn’t have done that.”

Gorton tells me she got the calling card and cancelled within the two-week period, avoiding the $19.95 charge. But about a month later $19.95 was withdrawn from her checking account. The next month another $19.95 was taken out. Not knowing how long the charges would keep coming, Gorton closed her checking account.

“What they did was deplorable, she says. “They’re basically crooks. They took advantage of me.”

Gorton was lucky. After complaining to the Better Business Bureau, she got her money back. But she learned her lesson. “Do not give your account number over the phone; even if they make it sound like it’s legitimate.”

My two cents
Many telemarketing sales people are honest and hard-working. But there are also plenty of crooks. When the phone rings, you have no way of knowing who is really on the line. Callers can lie. Caller ID can’t always be trusted; con artists can manipulate what shows up on the screen.

That’s why we have a simple rule in my house. We don’t buy things from an unknown caller. I won’t even make a charitable donation this way. I may ask the caller to send information, but I will not give out my credit card or bank account number to an unknown caller. Period! That may sound harsh, but it eliminates any chance of getting scammed.

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