The FTC versus the Hydra



When Heracles fought the Hydra, for every head he cut off, two more sprang into being. Only by cauterizing the stumps to prevent regeneration was our hero able to conquer the beast.

I’ve written before about “Ann from Cardholder Services;” despite the FTC’s 2012 full-court press against five companies responsible for these fraudulent robocalls, the nightmare continues; I’ve had several of these calls in the last week. And even though the last of the original 2012 defendants have just recently settled with the FTC, the business is still active under other heads.

In some ways, it’s easy to understand why this problem won’t go away – it’s highly lucrative, and there’s very little risk of being prosecuted. If you get shut down, you simply start up a new boiler room somewhere else under a different name. The money comes not from suckers wanting to lower their credit-card rates – that’s just icing on the cake – but rather from fractional pennies paid for “dipping” into the caller ID database. In other words, “Rachel” from Cardholder Services doesn’t even need to have you answer to make money; simply placing the call, and the robots do this millions of times a week, is sufficient to collect “royalties.” This article has a lot of good information about fraudulent companies names CallerId4U and Pacific Telecom, both tied to a businessman of questionable ethics named Paul Maduno; two relevant paragraphs follow:

CallerId4U owns 763,000 phone numbers Oregon, Washington, North Dakota, California, and Nevada.  These phone numbers are used exclusively for a telemarketing revenue sharing scheme.

CallerId4U provisions their phone numbers in 3rd party “CNAM” callerId databases.  These databases associate a phone number with the caller ID text that will be displayed during a phone call.   When a phone call is placed using one of these phone numbers, the telephone company receiving the call must pay a small fee of less than a cent to retrieve the caller Id text from the database.  These are called CNAM “dip” fees and refer to the process of “dipping” into the Caller Id database to retrieve the calling name text (CNAM.)

So even though the FTC went after five companies and shut them down, Maduno and his scam continue. It seems that only by beheading the Caller ID “dip” fee monster will this particular scam ever be shut down for good. In the meantime, the takeaways here are two:

  1. If you get one of these calls, just hang up. Don’t press 1 to speak to a representative – you’ll be opening yourself up for the secondary scam; and don’t press 2 to be removed – you’re only confirming to the scammers that you’re a real live number.
  2. If you do happen to connect with a representative, questioning them or cursing at them will have no effect – these are people trained in the art of deception and illicit operations, and they don’t give a rat’s South-40.

The Old Wolf has spoken.

2 responses to “The FTC versus the Hydra

  1. Pingback: Those dratted robocalls | Playing in the World Game

  2. Pingback: The Incredible Onslaught of Scamming Telemarketers | Playing in the World Game

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s