Episode 680: Anatomy Of A Scam : Planet Money You've seen these ads: "You can work from home and get rich. It's easy. Call this number!" So, what happens when you respond?

Episode 680: Anatomy Of A Scam

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For as long as I can remember, I've seen these ads. I think the first one I saw was just on a telephone pole. It was a piece of paper tacked up, saying something like you can work from home and get rich. Call this number. As I remember, there was a picture of a person wearing pajamas, and there was a cat.


These ads are now all over the Internet.

KESTENBAUM: These days, there are even videos.

QUINN: This is one of my favorites. There's this woman waking up in this big, plush bed. She's covered in what looks like a bear skin rug.

KESTENBAUM: And she has a cat.


UNIDENTIFIED ACTOR: (As character) Oh, hi there. What is it, like, noon?

QUINN: She sits up, grabs the cat, starts petting its belly.


UNIDENTIFIED ACTOR: (As character) So, you want to work from home, huh? No boss, no schedule, making money from home. Doesn't that sound great?

KESTENBAUM: It does sound great and also improbable.

QUINN: Because of course, this is a scam, but it is a very effective one. It's been around for decades, and it will not die.

KESTENBAUM: Hello and welcome to PLANET MONEY. I'm David Kestenbaum.

QUINN: And I'm Audrey Quinn.

Today on the show, the anatomy of a scam - what happens when you respond to one of those work from home ads?

KESTENBAUM: We got a secret document that reveals the tricks of the trade.

QUINN: We talk to one of the people who would have been on the other end trying to get your money.

KESTENBAUM: And we have recordings - actual recordings of phone calls where you can hear how the whole thing goes down.


UNIDENTIFIED SINGER: (Singing) You made it look like a shot in the dark. I felt like I spoke a different language.

UNIDENTIFIED MAN #1: PLANET MONEY and the following message are made possible by Squarespace. Whether you own a small business or just need a professional portfolio, you should showcase your passion. Squarespace has the tools and website templates that you need to capture every detail of what makes your passion worth pursuing. Start your free trial today. Visit squarespace.com/planetmoney. You should.


UNIDENTIFIED SINGER: (Singing) When all you need is just another...

KESTENBAUM: Despite what those work-from-home ads suggest, they are not offering you a job. They're not trying to hire you to work from home. The companies behind those ads are trying to sell you stuff so that, in theory, you can get rich working from home.

QUINN: Here's how it works. When you respond to one of those ads, you give them your name and your contact info. Then, you get a call from someone at a call center saying so, you want to work from home.

RYAN JENSEN: I would have been on the phone. That would've been the first call you would have received.

KESTENBAUM: This is Ryan Jensen. In 2007, he had just graduated from college in St. George, Utah, and he was looking for a job. A friend of his suggested he come to work with him at this call center. The call center industry is big in Utah.

QUINN: His friend takes him to this nondescript office park at the edge of town.

JENSEN: When you first walk in, there's a secretary sitting there. They just had a couch out front. I mean, they had a picture, maybe a plant out and then they just lead you on back into the call floor.

KESTENBAUM: There are about 30 guys back there on the call floor. They actually called it the bullpen. Everyone's sitting in cubicles with headsets on.

QUINN: Ryan's call center offered all types of packages. Most of them were to help you sell stuff online. You want to set up a website? They can build it for you. They'll coach you on how to run a web business, handle all the paperwork, the accounting.

KESTENBAUM: Ryan says the pitch was - this the Internet. It's huge. You can sell to the whole world.

JENSEN: I didn't really understand the online world too much back then. I mean, I was the guy that played football and hated computers. (Laughter) You know, back then, you think yeah, they're going to a great coaching company. They're going to get a website, and they're going to learn how to sell online. This is great.

QUINN: There were some red flags. Sometimes he'd get to the office and find white powder on his desk. Turned out to be residue from people snorting OxyContin.

KESTENBAUM: Ryan's job was to call people who had responded to one of those work-from-home ads and try to convince them that he had a very special offer, try to make the sale.

QUINN: We actually have recordings of these calls, not from the place where Ryan worked, but from a different company, The Tax Club.

KESTENBAUM: We got the recordings from the Federal Trade Commission, which has been trying to shut these places down. This one set of calls stood out to us in particular.


DORIS: Hello?

QUINN: We don't know this woman's name. It's bleeped out. But I like to think of her as Doris.

KESTENBAUM: The man calling says his name is Blake Cantor (ph), sounds perfectly nice.


BLAKE CANTOR: How are you this morning?

DORIS: Oh, I'm doing all right. I was just cleaning up my grandson's bedroom.

CANTOR: Oh, yeah?

DORIS: (Laughter).

CANTOR: Never ends, right (laughter)?

DORIS: Yeah, well, he's 16, and he's spoiled.

CANTOR: Spoiled?


CANTOR: (Laughter) Aren't they all? Well, most of them anyway. But that's OK, grandmothers are supposed to spoil their grandchildren. That's how it works.

KESTENBAUM: We played these calls for Ryan, the guy who'd worked in some of the call centers, and he walked us through the whole thing. The salespeople, he says, they're all working off of a script. Script is a few pages long, and it lays out exactly how to make the sale.

QUINN: He says these scripts are basically works of art. They're honed over years, passed all around Utah. They laid out the most time-tested, most efficient way to get someone to eventually give you their credit card number.

KESTENBAUM: That's what they want, your credit card number.

JENSEN: And an expiration date and a CCV - that's the goal. That's the bell-ringer.

KESTENBAUM: We got our hands on one of these scripts, and it basically breaks the whole sale down into these different parts. The first part is just called the intro. The idea is to establish rapport. Ryan says everybody had their own ways of doing it.

JENSEN: We'd say, for example - does your wife know about this business? Is she going to be involved? If they said yes, then say OK. Is she available to get on the phone as well now? If not, let's reschedule this because obviously, I'm not a very good marriage counselor, and I don't want to get you in trouble.

KESTENBAUM: Did you get a chuckle of that line?

JENSEN: Yeah. Oh, they always love that line.

KESTENBAUM: (Laughter).

QUINN: On the call with Blake and Doris, you can tell that Blake is using a script because there's this one moment where he messes up. One of Doris's answers comes unexpected, and he kind of trips up.


JENSEN: Have you ever set up an e-commerce business before?

DORIS: I did years ago.

CANTOR: OK. All right, listen. Don't worry. Most of - I mean, was it successful?

KESTENBAUM: Pay attention, Blake. It's a real person there.

After this, he just plows ahead. He goes on to the next part of the script, which is called the blast.

QUINN: The script for this part says ask find-out questions. Blake needs to figure out what Doris wants to do so he can figure out what to push on her.


CANTOR: Do know what types of products you're going to be selling yet?

DORIS: I haven't done anything yet.

CANTOR: OK. All right.

DORIS: My laptop doesn't seem to do what I want it to do.

CANTOR: Right, right. It always works that way. Well, listen - you know, I'm going to guide you in getting your back end of your business set up so that you can - so that you can make as much money as possible as quickly as possible and save as much money as possible tax-wise, OK?

DORIS: That's good.

QUINN: Doris doesn't have a working computer or any idea what she wants to sell.

KESTENBAUM: Some people sold weight loss shakes or herbal supplements or skin cream, that kind of stuff.

QUINN: She has no idea, but Blake moves right on to the next part of the script. It's called the probe.

KESTENBAUM: The probe is this critical, delicate part of this whole pitch. Blake needs to figure out how much money she has so he can figure out how much he can get from her. He needs to probe her finances.

QUINN: Which seems like a hard thing to just turn a conversation to - so, how much money do you have? - but Blake finds a way in.

KESTENBAUM: This is just three minutes into the call.


CANTOR: I don't know if you're aware of this, but 1 out of 3 Internet businesses are sued every year for one violation or another. Now, I just want to get an idea of what type of assets you have that we will protecting with this corporation. Are you a homeowner?


CANTOR: OK. You have a mortgage, I'm assuming.


CANTOR: OK. Do you own any vehicles?

DORIS: I have a van.

CANTOR: A van?

DORIS: Yeah.

CANTOR: OK. Is it a lease or...

DORIS: No. It's - I paid for that one.

CANTOR: OK. You own that.

QUINN: Ryan, the guy who used to work in these call centers, he says this part of the script made him feel super nervous.

KESTENBAUM: Yeah. For him, this was all just very awkward. Remember, he was 20-something-years-old, and he thought, like - who am I to be advising these people? What do I know about money? I'm broke. But some of the salesmen there, he says, had no problem with this.

Were there some guys who, like, could almost always close a deal?

JENSEN: Yeah. Like, give me 10, 15 minutes, get a smoke break. I'll come back and hammer this down, so they just call after call after call - just what they do for a living. They enjoy it.

KESTENBAUM: How do they do that?

JENSEN: What makes them good is no fear. They don't - they're not afraid to talk about money. Because if you're afraid to talk about money on the phone, they're going to be afraid to talk about money. If you just act like yeah, $2,000. This is what it is. I guess you're broke. How many credit cards do you have? If you just talk to them normally, they'll feel more comfortable about it.

QUINN: Ryan says these salesmen would just be walking around the office, their headsets on. They'd putt a few golf balls while they're talking on the call.

KESTENBAUM: On this call we're listen to, Blake, the salesman, does exactly what Ryan says the pros do. He just plays it super casual, and Doris goes along with it. She tells him all these specific financial details. Like, she tells him for that mortgage that she owes about $200,000 on it.


CANTOR: It's really not bad. I mean, I know a lot of people - I speak to people every day. I mean, I know people in much, much worse positions than you are. Do you have savings?

DORIS: Yeah, a little bit.

CANTOR: A little bit.

DORIS: Yeah. When my mother passed away, she gave us kids some, so I put it away.

CANTOR: OK, good. Just a ballpark if you had to say. I don't want an exact number. It's none of my business. I'm just...

DORIS: I'd say right around 50,000.

CANTOR: Fifty, OK. And you have working capital in your checking account?


CANTOR: Ballpark, what would you say that is?

DORIS: 2,000.


QUINN: You can almost hear Blake doing the math here, counting up how much money he can go after.

KESTENBAUM: At this point, Blake moves on to the next part of the script. And in the script that we have, what it says is find the pain - find the fear, basically. It is adamant about this. It says find more pain if needed. Everybody has pain. It is your job to find it.

QUINN: It's like this demented twist on the classic sales move. Convince the person that you have the solution to their problems.

So Blake manufactures a pain for Doris.


CANTOR: This way, you don't have to deal with the IRS on your own. I don't know if you've ever dealt with them, but it's like dealing with the Gestapo.

KESTENBAUM: Ryan liked this part.

JENSEN: It's a fancy line (laughter). That's a fancy one-liner.

KESTENBAUM: You think he uses that a lot?

JENSEN: Absolutely. Absolutely he does.


CANTOR: Now, how many hours a week do you think you're going to invest in this business?

DORIS: Five to eight hours a day.

CANTOR: Really? That's fantastic. OK - because investing as little as 10 hours a week, OK, can potentially generate a six-figure income. So I mean, as long as you dedicate...

DORIS: Maybe I'll get a seven.


CANTOR: Let's hope.

KESTENBAUM: Seven figures - that is $1 million. Doris is talking about working from home, like, half-time and hoping she's going to make $1 million.

QUINN: I've been thinking about why people fall for this. And when you're someone who's never done super great financially, it can seem kind of like magic how some people just make it.

KESTENBAUM: And here's this guy saying I know those secrets. I can tell them to you. It's going to be complicated, but together, we can do it.

QUINN: And 21 minutes and 45 seconds into the call, Blake goes for it. He goes in for the sell.


CANTOR: Now look, our membership consists of a one-time initial setup fee and only a small corresponding retainer fee. So for that, everything that we've discussed here today, it's only a one-time investment of $4,785, OK, and $49.95 a month, which I will waive for the first 3 months.

DORIS: Forty-nine what?

CANTOR: Forty-nine ninety-five.

DORIS: Good thing I don't have to pay it all at once.

KESTENBAUM: To his credit, Blake is upfront here. No, he says, we are talking about you paying $4,785 upfront plus $49.95 a month.

QUINN: But he says you can write it off. He tries to get her to pay out of her checking account.


CANTOR: I have everything in the system here set up. It would be very helpful to me if we can start the billing process.

DORIS: I can't do that because I don't have that much in there.


DORIS: I just maxed it out.

CANTOR: OK. What can you do? Is there anything you can do right this moment?

DORIS: No, not right now.

CANTOR: OK. That's fine. I'll just save everything here.

DORIS: Sorry to do that to you.

CANTOR: No, it's OK. It's all right.

QUINN: She apologizes to a guy who's trying to take her money.

KESTENBAUM: That's how good he is.

Blake makes one more attempt. He says just give me your debit card information now. You can put the money in it tomorrow.


CANTOR: All right. You're going to be using your debit card. Was that correct?

DORIS: Yeah.

CANTOR: Is that a Visa or a MasterCard?

DORIS: Visa.

CANTOR: A Visa, all right. What are those numbers?

DORIS: Oh, you're fast.

QUINN: You're fast, she tells him. And here's this moment where I'm like maybe she's caught on. Maybe there's something deep in her gut that is saying - no, this is not right. I was totally rooting for her. But then this happens.


DORIS: I got it. OK, the number is...


CANTOR: Expiration?


CANTOR: OK, and the three-digit CVV number on the back?


KESTENBAUM: Ryan, the guy who worked in the call centers, told us that if you are the salesperson and you get to this point, you are psyched.

JENSEN: He's doing a dance in his chair right there. He got 16 digits, a CCV and an expiration date.

QUINN: From a woman he'd never met. All he'd done was spend 35 minutes with her on the phone.

KESTENBAUM: And she did transfer the money into her account that she promised. She paid the $4,785 membership fee.

QUINN: The salesman, Blake, he would have made 10 to 20 percent of that. That's as much as $1,000 for one call.

KESTENBAUM: Ryan told us he made less from the stuff that he was selling, but he was right out of college, and it felt like easy money.

What was the story that you told yourself to make yourself feel OK about it?

JENSEN: Just trying to make a living like everyone else.

KESTENBAUM: But like, just reading through the script that we have here - I don't how different...


KESTENBAUM: ...Yours was. It feels awfully manipulative. You know, it's thousands of dollars...


KESTENBAUM: ...For people who, like, do not have it. And if you just think about it for a second, the idea that they're going to be able to set up a website and make, like, a $100,000 a year selling whatever, it just seems impossible, you know? Like...

JENSEN: You're right.

KESTENBAUM: Did you feel that way?

JENSEN: You're absolutely right.

KESTENBAUM: Did you feel that way at the time?

JENSEN: You know, I was a little bit young, a little bit naive. I mean, I'd have to completely say - I mean, I wasn't completely, completely oblivious to it. I mean, you question at times a little bit. You do feel a little, you know, aggressive, and eventually, that feeling wears off. I mean, it's a sale at the end of the day is what you end up thinking. A sale is a sale is a sale.

QUINN: And once you make a sale, that is not the end because once someone has shown they're willing to buy something, you can probably get them to buy more.

KESTENBAUM: After Doris had that call with Blake from The Tax Club, she gets what is supposed to be her first support call to help her get started. It's a different salesman this time.

QUINN: And this new salesman, he pushes her further. And this gets us to some of the craftiest few lines in this whole set of calls.


UNIDENTIFIED MAN #2: Have you done anything in regards to getting a loan for the business?

DORIS: No, because I don't really want to go into more debt.

UNIDENTIFIED MAN #2: Well, no, it's not exactly about going more into debt. What I would rather see you do is take the money you've already invested and kind of, like, pay it off with the loan, just so the business would actually claim those liabilities. So it'd be like paying yourself back with a business loan. Does that make sense? So you're really not borrowing any more money. You're just kind of paying off what you've already invested. Does that sound better?

DORIS: But it has to be paid back, too.

UNIDENTIFIED MAN #2: I can't hear you. What'd you say?

DORIS: I said it would still have to be paid back.

UNIDENTIFIED MAN #2: Well, it's the same exact situation you're in now, isn't it? Think of the difference. What's the difference?

KESTENBAUM: You know, there's this moment in there where she has correctly identified the flaw in his logic.

QUINN: And you're, like, go, Doris.

KESTENBAUM: And then he just does this math mind trick, and he steamrolls over her.

QUINN: This part is horrible. It's like listening to someone get beat up. She does eventually take out a loan.

KESTENBAUM: Which is more money they can go after.

QUINN: And at the end of this call, he gets another 16 digits from her. They charge her $4,000, and this is not the last call on Doris's file.

KESTENBAUM: Ryan Jensen, our guide for all this, says that he eventually started running his own call center. He told us he was trying to run a legitimate business, actually give people a shot at setting up a website and being able to sell stuff online. But a lot of the coaching and services he was selling, they were provided by other companies. And at some point, it started becoming pretty clear that those products were not very good.

QUINN: His customers were being passed from company to company, just getting sold more and more stuff.

KESTENBAUM: Ryan remembers this one call with a customer, in particular, that kind of changed things for him.

JENSEN: So I sell this guy, you know, four or five grand in coaching to build him a website and do what-not and coaching. Well, after that, he goes to The Tax Club and spends another, hell, $16,000. So this guy calls us back because we were his main point of contact, and he calls us back and he's like, I just spent all this money on a business. It's not bringing any income. And he's crying. I mean, he spent $24,000. He's on speaker crying to us. You know, I mean, when you have somebody that's calling you back broke, $24,000 later with nothing to show for it, I mean, it hits some chords. I mean, it hit some chords.

KESTENBAUM: If you're wondering how these call centers can just keep operating, it's worth pointing out that they have pretty strong political connections. Ryan's call center was based in Utah, and a lot of these call centers are in Utah, where there has not been much of a crackdown.

QUINN: The call centers there have made some pretty major campaign contributions. Two recent attorneys general have been charged with bribery in connection with the call centers.

KESTENBAUM: The lawyers at the Federal Trade Commission say trying to go after these companies is a bit like playing whack-a-mole. Once enough customers complain, the company just shuts down and opens up under a new name.

QUINN: The Tax Club, the company you've been hearing from on those calls with Doris, they did actually get shut down for practicing deceptive sales tactics.

KESTENBAUM: That is why we have recordings of the phone calls.

QUINN: According to legal filings, The Tax Club took in over $220 million from people.

KESTENBAUM: There is just one more phone call in Doris's file, and it's a rough one. It is from someone calling on her behalf to a financing company that The Tax Club had set Doris up with.


CAESAR: (Unintelligible) Financing, this is Caesar (ph).

UNIDENTIFIED WOMAN: Yeah, Caesar. I've been trying to get a hold of you.




UNIDENTIFIED WOMAN: Forever. Are you at your desk?


UNIDENTIFIED WOMAN: OK, fine. You have a few minutes?

CAESAR: I do. How can I help out here?

QUINN: The woman says she's trying to track down a loan that Doris took out for another home business program.


UNIDENTIFIED WOMAN: This loan has to be zeroed out, for one.

CAESAR: OK. And why is that?

UNIDENTIFIED WOMAN: Well, because (beep) passed away right after she signed that contract.

CAESAR: Oh, I'm sorry to hear that. All right.

UNIDENTIFIED WOMAN: We had to put a freeze on all of her bank accounts and stuff because money has been flying out of there left and right.

CAESAR: OK. And just for your records, I'm sending an email right now. She had two accounts. I have a hard time explaining this. You want me to hold on and get an explanation for you?

UNIDENTIFIED WOMAN: No, I just want to know where, like, $45,000 went towards these people. It's been coming out of her account, and it started all in August. And it was going to something, The Tax Club Global web something or another.

CAESAR: A lot of those guys are building, you know, online businesses or storefronts, and so those services help them either run their business or help them do their taxes.

UNIDENTIFIED WOMAN: (Laughter) This is a woman who had dementia, 75 years old and could barely turn on a computer.

KESTENBAUM: The man on the phone agrees to refund the money to Doris's estate. We do not know if she got anything back. The FTC is still sorting through the mess. Something like 20,000 people said they had been ripped off by The Tax Club. That's from a four-year period.

QUINN: Ryan Jensen, the call center guy we talked to, he was eventually fined $400,000 by the state of Utah. So far, he's paid about 5,000 of it.

KESTENBAUM: Ryan says he's trying to speak out about all the corruption in the call center industry. We asked him if he felt bad about his role in everything. Here's what he said.

JENSEN: I mean, that's something that, hopefully, I can learn from. And you know, I will learn from, you know. Now's my chance to apologize if I did hurt anyone, and I'm more than happy to try to make that right.

KESTENBAUM: He says if anyone thinks he steered them wrong, get in touch. He'll do what he can.


UNIDENTIFIED SINGER: (Singing) The room was spinning, so I did the same. She was about to leave, but it was a turning point.

KESTENBAUM: We should say we tried to reach out to all the people you heard in those recorded phone calls.

QUINN: We asked the FTC to put us in touch with Doris's family. They said they couldn't for privacy reasons.

KESTENBAUM: And we tried to reach the salesmen, at least by the names they gave in those recordings. No one returned our calls. Our show today was produced by Jess Jiang.

QUINN: Special thanks goes to Jason Jones. He provided us with the call center script. And to Christine Durst, she runs a scam-spotting site.

KESTENBAUM: It's called RatRaceRebellion.

You can send us email. We are planetmoney@npr.org, or you can tweet us @planetmoney. And if you happen to be an undiscovered musician looking for your big break, check out NPR's Tiny Desk Contest. You send in a video of you playing an original song at a desk, and you could win a chance to play at NPR's "Tiny Desk." That's that great video series where they get amazing musicians to perform at a desk at NPR. Enter by February 2 at npr.org/tinydeskcontest.

I'm David Kestenbaum.

QUINN: And I'm Audrey Quinn.

Thanks for listening.


UNIDENTIFIED SINGER: (Singing) Anything you wanted. When everything is just another story, when all you need is just another hour with her, when you got it just the way you like it, time to forget it and go home. When everything is just another story, when all you need is just another hour...

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