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Fake Magazine Telemarketing Scam Brought To Justice

Attorney General John Suthers has filed a lawsuit against   High, High 2, Subscription Solutions, C&R Marketing & Associates, 5280 Publication LLC, Magazine Man,  along with the owners of the companies, Raymond B. Jones Jr., his mother, Cora Jones for an alleged telemarketing scam.
This mother and son team is accused of duping victims by calling them, pretending to be the publisher of a magazine to which they subscribe, and asking to “verify” some financial information.

The defendants’ presumed business was the solicitation of magazine packages over the telephone, the complaint states. “However, defendants’ true business model is to trick consumers into providing or confirming their confidential financial information and deceive consumers into expensive, duplicative contracts for magazine solicitations valued at up to $1,300.”
According to the lawsuit, the defendants bought “lead lists” with addresses and telephone numbers of magazine subscribers, then hired telemarketers to offer them bogus deals in a closely scripted three-step process.
“The Defendants’ sales calls were orchestrated into 3 steps,” the complaint states. “In the first 2 steps, the defendants pretended to be the company that was currently providing magazines to the consumer, told the consumer they were calling to verify and update the consumer’s accounts, tricking the consumer into disclosing his or her confidential financial information.  In the third step: a recorded ‘verification’ that defendants would later claim was an oral contract under which the consumer agreed to purchase the defendants’ magazine subscription package.

As a guise to appear legitimate, the defendants warned their victims that other, unscrupulous companies might try to sell them subscriptions they don’t want, the state says.

“The defendants refer to the first step as the ‘Sales Pitch. ‘A telemarketer calls a consumer and begins by falsely telling the consumer, ‘I’m calling with the credit department for the publishers we are the people who send the magazines out there to you.’
“Next, the telemarketer assures the consumer that ‘I’m not calling to collect any money … we are actually calling to pre-warn you. To let you know that if any other company should happen to give you a call and want you to add-on, extend or renew your account with their company, we are asking that you do not.’
“The telemarketer then tells the consumer that he or she is ‘still a preferred customer.’  “The telemarketer then asks the consumer a series of questions,  including ‘How do you make your payments for your magazines? Visa, MasterCard, American Express, or Discover?’ After getting this information, the telemarketer puts the consumer on hold and transfers him or her to the ‘capper.’
The “capper,” then asks for the consumer’s Social Security, bank account and/or credit card numbers.  “To begin the 2nd step, the capper tells the consumer that ‘you are a preferred customer and receiving your magazines at the $3.99 a week.’  The capper then y tells the consumer that the they need to provide the consumer with the company’s ‘New Master Switch List’ and new phone number.
“Then, the capper takes the first step in deceiving the consumer into providing her confidential financial information. The capper says, ‘We have also changed the billing system, again we have gone strictly automated … and your monthly billing was going through your credit card/checking account? Correct?’ …
“Next, the capper says that the he needs to verify demographic information, including the consumer’s address, age, birth date, and details about the consumer’s employment.   The capper also asks for the consumer’s social security number.
“Equipped with the information gained earlier in the process, the capper then says, ‘Now I show your first payment went through your credit card or checking account.’ … If the consumer confirms that she is paying for magazines with a credit card, the cappers says, ‘And it is still the same card and you haven’t reported it lost or stolen in the past year, have you?’ The capper then says ‘Now I do need you to verify the card numbers.’ The capper also asks to verify the card’s expiration date and three-digit CVV code on the back of the card.
“If the consumer says that he or she is making payments through his or her checking account, the capper asks the consumer to verify their bank account number.”
“Having convinced the consumer that the company has called merely to verify and update an existing order, the capper then employs the 3rd step, the recorded verification.
“Before beginning the recorded verification, the telemarketers instruct the consumers not to ask any questions during the recording and that the questions will be answered after the recording.
“The verification begins, ‘We do record this part for your protection and to make a permanent record of your account.’  The capper then lists a payment amount and payment plan. Believing that they are merely verifying and existing order, consumers sometimes indicate their agreement with the verification. Defendants will later use this recording as proof of a brand new oral contract under which the consumer has agreed to defendants’ magazine package,” according to the complaint.
“Once they have the consumer’s financial information, the defendants begin taking money out of the consumer’s credit or bank accounts on a monthly basis. If a consumer attempts to cancel the order or closes her credit card of bank account, defendants begin to aggressively collect on the contract. Defendants send letters to consumers that threaten the addition of a late fee to the consumer’s account and warn consumers that failure to pay will have a negative effect on their credit rating.

Knowing that scams like this exist, it is best to never give your personal or financial information to someone calling you.  Thankfully, these scam artists were caught, but there are many more out there.  If you are receiving unsolicited telemarketing calls, you may be entitled to compensation if they are violating the Telephone Consumer Protection Act (TCPA).  Please call California Consumer Protection Attorney, Todd M. Friedman at 877-449-8898 for a free consultation.