Tis the Season for PTM Service Scams

Consumers are offered self-protection

Post-Transaction Marketing (PTM) scams flourish at Christmas. Technique: Your toll-free phone order is almost complete when the operator offers a “service” you did not call about.  If you respond with a word or grunt that might be interpreted as affirmative, you may have unwittingly bought a service you’ll never use but will annually pay for.

Timing and wording are critical to successful scamming: In a live-operator telephone scheme, the PTM launch comes after you have willingly surrendered credit card info for a legit purchase. It’s the perfect moment to sell a vague service for either travel, purchase discounts, credit management or subscription extensions. And you won’t see the credit card charge until a later statement cycle.

A PTM pioneer is James F. McCann, the entrepreneur who started 1-800-Flowers.com.  Last week he was back in the news when revealed as a NY Mets minor stockholder. His PTM was sold to customers who liked his flower service and came back for more. It reportedly grossed millions. His PTM ended when the New York Attorney General decided consumers were being taken for a ride by “a membership program without their understanding or a conscious intent to be enrolled.” But the AG let McCann off easy with a $325,000 settlement that involved educating consumers. (Source: “A Mets Owner and Claims of Consumer Fraud,” New York Times, 3 Dec 2012.)

PTM scams are hard to prosecute because scamsters set up multi-state operations and frequently use offshore telemarketing operations. That complicates action from federal and state regulators, no matter the consumer protection statutes they are supposed to enforce. Example: At the end of a seminar last week offered by NJ’s Division of Consumer Affairs, the advice was simply never use a credit card to buy anything. How’s that for consumer protection?

For more on PTM, use this link:

Deception in Post-Transa#1E79BA


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