Let me begin by passing on a story I heard recently.

"You've got to understand," said the voice on the other end of the telephone. "Typically, I don't make these types of calls. I've got people to do that. I've got 11 years in this business and worked my way up to senior vice president with 400 clients and $40 million dollars under management. I don't need this account, but I want it."

The caller was attempting to close a deal for an unknown micro-cap stock by trotting out some of his most impressive facts. But it was all a lie. In fact, he had been on the job for less than a month and was reading from a script supplied by his employer.

"Perhaps a return of 100 percent in 20 minutes sounds a bit unrealistic," the scam artist continued. "But that's exactly how all our initial public offerings trade. We did three deals last year yielding collectively 34 points within the first ten days of trading. That's a fact! All I ask for is your vote of confidence this one time. I won't let you down."

Taken from an actual script seized by state investigators from a small brokerage firm, these words sum up the danger faced by investors who purchase shares of stock in unknown companies over the phone from people they don't know. Although the companies are small, the dishonest way the stock is manipulated and sold has a large impact.

In the late 1970s and early 1980s, so-called "penny stock" frauds were rampant in Colorado and Utah until state securities officials moved in and shut them down. Although the scams of today are similar to the swindles of that earlier time, there are significant differences. The most obvious difference is the marketplace itself.

Today, there are far more mid-income investors than ever. Products are more sophisticated and choices have multiplied. Due to the growth of 401(k) plans and other self-directed retirement programs and fears about the future of Social Security, people are encouraged to be more "aggressive" in their investments. The marketers of the most legitimate firms down to bottom dwelling perpetrators of fraud are singing the same siren song: "You've got to be in the market or you're going to be left behind." The message is everywhere. It's hard to pick up a magazine or watch television or listen to the radio without hearing advertisements for mutual funds or other securities products.

Well, now we're all going to get some much needed help from Albany.

Two tough new bills were signed by Governor Pataki to protect consumers from unscrupulous telemarketers. The first bill creates a statewide "DO NOT CALL REGISTRY" of consumers who don't want to receive unsolicited sales calls. Telemarketers must register with the NYS Department of State and are barred from accessing bank accounts without the prior written authorization of the consumer. Violation of any of the bill's provisions will cost the telemarketer a fine of up to $2,000.

The second bill, "Telemarketing and Consumer Fraud and Abuse Protection Act," among other provisions, makes it illegal:

• to intimidate, harass, threaten, or use profane language during a call;
• to call before 8:00 a.m. and after 9:00 p.m.;
• to violate the "Do Not Call Registry" list;
• to give false or misleading information;
• to request a fee in advance to improve a person's credit history;
• to request a fee to recover money or other items lost by the consumer in a prior telemarketing transaction.

New Yorkers will be able to register on the "Do Not Call Registry" free of charge by making a single phone call to the Consumer Protection Board's (CPB) toll-free Consumer Help Line, 1-800-NYS-1220, or by visiting the CPB's web site at www.consumer.state.ny.us

While the "Do Not Call Registry" does not officially open until April 1, 2001 Governor Pataki said New Yorkers can preregister now by calling the Help Line. Telemarketing calls will be blocked after the law takes effect on April 1st, 2001.

These bills will certainly cause telemarketers to re-think their manner and methods, but they are not enough to really stop the unscrupulous practioners of the nasty art of defrauding the unsuspecting victims.

• AARP Telemarketing Fraud
• FBI Telemarketing Fraud Information
• Federal Trade Commission (file a complaint)
• U.S. Postal Inspection Service: Characteristics of Telemarketing Fraud Schemes
• What's the Department of Justice Doing About Telemarketing Fraud?