FOR IMMEDIATE RELEASE:  June 2, 1988


          FTC FIGHTING TELEMARKETING FRAUD, BUT NEEDS
     MORE RESOURCES AND MORE HELP, COMMISSIONER STRENIO SAYS


     Since 1983, the Federal Trade Commission has obtained court
judgments for nearly $92 million in redress for victims of
telemarketing fraud, FTC Commissioner Andrew J. Strenio, Jr.,
said today.  He said that the Commission has mounted "a major
attack against swindlers who have been using telephones to prey
upon consumers."
     Strenio told the National Association of Consumer Agency
Administrators that telemarketing fraud is a major problem.  "It
has been estimated that telemarketing frauds currently bilk
consumers out of some $1 billion a year -- and that may well be a
low estimate," he said.
     The FTC has successfully brought more than 28 federal
district court cases against nationwide telemarketing scams since
1983, he said, and these actions have put some 165 individual and
corporate defendants under federal order.  In addition, the
Commission has obtained six criminal convictions for contempt of
these orders.
     While the Commission has secured good results in this area,
there are three "discouraging factors" that make prosecution of
telemarketing fraud difficult, according to the Commissioner.
First, "scam artists by and large are speedy and skillful when it
comes to dissipating their ill-gotten profits," so that the
Commission "typically only is able to obtain cents on the dollar
as redress for injured consumers."  For example, he noted that
only $35 million of the almost $92 million in judgments obtained
by the Commission has been returned to consumers or is available
for return to consumers.
     Second, the Commission's resources are severely limited, and
getting smaller, Strenio said.  For example, in fiscal year 1981,
the FTC had 530 workyears in consumer protection, 444 workyears
in fiscal 1984, but only 349 workyears in fiscal 1988.  These
numbers cover not only telemarketing fraud, but all consumer
protection actions, including advertising and credit problems.
He said, "I am convinced that additional resources are essential
for the Commission to fulfull aggressively our legal mandate."
     Third, the Commission's legal authority to combat the
problem of telemarketing fraud could be improved in several
ways.  Strenio endorsed six legislative proposals that the FTC
has made.  Although Congress has not yet enacted the Commission's
legislative proposals, Commissioner Strenio said that he was
pleased to note the existence of strong and bipartisan outrage on
Capitol Hill about the prevalence of telemarketing fraud.  He
noted that "there is a determination in Congress to go after
these con artists in a big way."

                             (More)
     Commissioner Strenio also noted that "the problem is so
immense that neither the FTC nor any other single agency can
solve it alone," and "we still will need a high level of
commitment from every law enforcement agency with jurisdiction."
     There is already cooperation between the FTC and the states
he said.  "Close cooperation with state agencies has become so
routine at the Commission that virtually every case filed by us
within the last year has been the product of a combined state-FTC
effort."
     In addition, the Commission and the National Association of
Attorneys General have established an automated databank on
telemarketing fraud.  Participants in the databank include the
FTC, the state attorneys general for 13 states, the U.S. Postal
Service, the U.S. Secret Service, and the Florida Comptroller's
Office.  Another 10 states are expected to join soon.  Two
private organizations -- the Council of Better Business Bureaus
and the National Office Machine Dealers Association -- contribute
information.  Strenio noted that the more participants in the
databank, the more effective it will be in stamping out
telemarketing fraud.
     Copies of the speech are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.,
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

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MEDIA CONTACT:     Susan Ticknor, Office of Public Affairs,
                   202-326-2181

(StrenioTel)