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CRIMINAL LAW BLOG

What Is Telemarketing Fraud?

Posted by Dmitry Gorin | Mar 09, 2023

California Business and Professions Code 17511.9 describes the crime of telemarketing fraud as using deceitful or fraudulent business schemes by using a telephone to sell goods or services. A prosecutor can file BPC 17511.9 charges as a misdemeanor or felony with a penalty of up to three years in jail.

Put simply; telemarketers must follow specific restrictions on how they can conduct their business. Most people are very familiar with receiving unsolicited annoying phone calls from a person or a voicemail who is attempting to sell something.

Telemarketing Fraud in California - Business and Professions Code 17511.9

Telemarketing is big business; most are from legitimate companies trying to sell their products. There has been, however, a sharp rise in fraudulent scams and phone calls that generally target vulnerable people, especially elderly citizens.  

Telemarketing fraud is a white-collar crime where somebody uses deceit, trickery, or a fraudulent business scheme over the telephone to sell something or commit another crime.

For example, a caller will claim they work for Internal Revenue Service and tell someone they are under investigation for back taxes but can quickly resolve the case if they pay a small fee.

All they have to do to avoid further penalties is to give them their social security and credit card numbers.  Let's review this law below for more information.  

What is the Definition of Telemarketing Fraud?

In the state of California, Business and Professions Code Section 17511.9 defines telemarketing fraud as “Anyone including the seller, salesperson, agent of the seller, or independent contractor, who willfully uses any device or scheme to deceive related to an offer or sale by a telephonic seller, or willfully engages in any business practice which operates as a fraud or deceit upon any person in connection with a sale.”

For a prosecutor to convict someone of BPC 17511.9, several factors must be proven beyond any reasonable doubt that a defendant:

  • was a seller, salesperson, agent, representative of a seller, or independent contractor of a good or service;
  • used a device or scheme over the telephone directly related to an offer to sell a good or service, or
  • willfully, directly, or indirectly engaged in fraud or deceit over the telephone to sell the good or service.

These “elements of the crime” target people who use a phone to sell something through an unlawful scheme, such as fraud or deceit.

In the context of this statute, “fraud” is an act that results in an unfair benefit or when it causes harm or loss to someone else.

Related California crimes include Penal Code 653(m), PC annoying phone calls, and Business and Professions Code 17500 BPC false advertising.  

What are the BPC 17511.9 Penalties?  

Business and Professions Code 17511.9 telemarketing fraud is a “wobbler,” meaning a prosecutor can file the criminal case as a misdemeanor or felony offense.

This decision on how to file the case hinges typically on the case's specific circumstances and a defendant's criminal record.

Please note that an initial felony filing for telemarketing fraud can often be reduced to a misdemeanor later.

If you are convicted of a misdemeanor case of BPC 17511.9, the penalties include the following:  

  • maximum of one year in county jail,
  • a $10,000 fine for each transaction, or
  • summary probation rather than jail time.

If you are convicted of a felony case of telemarketing fraud, the penalties include the following:  

  • 16 months, two years, or three years in county jail,
  • A $10,000 fine for each illegal transaction, or
  • Formal probation rather than jail time.

Readers should take note of the unique $10,000 fine applied for each transaction. Put simply, any defendant engaging in a large-scale telemarketing fraud operation that deceived multiple victims could face fines totaling hundreds of thousands of dollars if convicted.

Defenses for Telemarketing Fraud Cases

If you face Business and Professions Code 17511.9 telemarketing fraud charges, our criminal defense lawyers can use several strategies to reduce or dismiss the charges.

Lack of intent or fraud 

First, most fraud-related cases will center around the crucial issue of whether you intended to commit fraud, which means to obtain something to which you were not entitled by misrepresentation, deceit, or dishonesty.

Defenses for Telemarketing Fraud Cases

For example, exaggerating the effectiveness of a product could be an unfair practice under California civil laws, but it's not a crime.

To commit fraud, you must have known you were using deceit or tricks to persuade the victim into buying a product or service which does not exist or isn't what you claimed.

Not a salesperson 

We might be able to argue that you can't be considered a salesperson as defined under the statute.

If you go back to the elements of the crime above, one of the factors is that it must be proven that you were acting as a salesperson or agent of the seller. We might be able to prove you were not attempting to sell something.

Prefiling intervention 

If you are under a criminal investigation for telemarketing fraud, a prefiling intervention on your behalf by our law firm could result in convincing the prosecutor from filing formal charges before court, even if you were already arrested for a felony case.

If you or a family member are currently under a criminal investigation for or have already been arrested and charged with violating Business and Professions Code Section 17511.9 telemarketing fraud laws, contact our experienced California criminal defense attorneys for an initial consultation. 

Early intervention into your case can be crucial to the outcome as the negotiation with the District Attorney's Office might be possible to resolve the issue favorably.

Eisner Gorin LLP is located in Los Angeles, CA. Contact our firm to review the details of your case during an initial consultation at (877) 781-1570.

About the Author

Dmitry Gorin

Dmitry Gorin is a licensed attorney, who has been involved in criminal trial work and pretrial litigation since 1994. Before becoming partner in Eisner Gorin LLP, Mr. Gorin was a Senior Deputy District Attorney in Los Angeles Courts for more than ten years. As a criminal tri...

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