Question

Telemarketing Fraud and Endorsement

Part I

Telemarketing fraud is a widespread type of white-collar crime. Elderly victims are often specifically targeted.

Why is telemarketing fraud so difficult to prevent or prosecute?

In what ways have the Internet and social media made telemarketing fraud a bigger problem?

What characteristics of the elderly make them attractive targets for perpetrators of phone fraud?

In addition, elderly victims are more susceptible to religious and charity-based scams. It is especially difficult to prosecute religious organizations when they are suspected of engaging in fraudulent activities.

What characteristics of these large religious organizations make investigation difficult?

How can law enforcement work around these issues?

Part II

Celebrities often endorse products. For example, Michael Jordan promotes Hanes underwear and Jennifer Garner promotes a credit card.

How much responsibility should a celebrity endorser bear if the product they promote turns out to be fraudulent, unsafe, or harmful in some way?

Describe a real-life example of a celebrity endorsing a harmful or illegal product. Explain why he or she should not be endorsing that product.

Answer 1

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1. Telemarketing fraud is difficult to prevent or prosecute and that is the reason it is rampant. Criminal procure phone numbers and changes them soon after the fraud. Anybody who can speak English with a telephone number can engage in telemarketing fraud. Criminals use these connections one time for a fraud and then dispose of these numbers as well as changes cities and targets. It is difficult for police to track these frauds as the opportunity cost is very high and tracing difficult as criminals are anonymous.
2. Internet and social media has made these problems bigger due to lack of privacy of information. Telemarketers gather information about victim from the internet. When they give a call to victim, they refer to the information posted by them on internet in order to appear as a genuine call. E.g. Victim complained about poor service of telephone network to the network operator, tele marketers call the victim posing as network operator in order to make the call sound genuine.
3. Elderly citizens are more prone to telemarketing frauds as they have excellent credit and own their own homes. They are also trusting and polite in nature. Fraudsters con senior citizens as they believe due to loss of memory at their stage, they will be poor witnesses, will not be able to provide much information for investigation and also realize themselves very late that they have been conned. Senior citizens sometimes do not report these scams as they feel ashamed and also do not know whom to report it to.
4. Elderly people are susceptible to religious or charity based scams as most of the elderly citizens are associated with some or the other religious groups or NGOs. In these cases fraudsters calls up these elderly people posing as a member of the group. Fraudsters exploit the trust that elderly people have in these organizations and con them by asking them to donate money in charities or invest in schemes offered by religious groups. It is difficult to prosecute religious organizations due to the strong emotion and support they have from the community. Prosecuting religious organizations can cause public unrest. It is believed that church leaders are responsible to god.