California's famous telephone con men may be packing up their sucker lists and heading for another state. A new law requires them to register and disclose their sales pitch and, on the whole, they'd rather not.
For several years, California has been the national headquarters for boiler-room sales -- those crimes of charm in which sincere long-distance salesmen fraudulently part you from your money.
Many also operate in Florida and Texas (like everyone else, they prefer warm weather). But an agglomeration of telephone crooks have been hanging out in southern California and using low-cost WATS phone lines to dial their way across the country.
For consumers, the new law is more important for the example it sets for the other states than anything else. After all, if you send a sincere salesmen $5,000 for what turns out to be $2,000 worth of silver coins, it hardly matters whether he called you from California or Nevada.
In fact, the next time he might indeed call you from Nevada, if California manages to chase him out of town. And that's exactly the point. To control this plague and deny the enemy a hiding place, all the states will have to notice California's pioneering work and join the fight themselves. Here's what's going on:
*All telephone sellers in California now have to register every year, on penalty of jail. So far, the state has heard from close to 300 of them, the legitimate as well as the shady.
*They have to file a copy of their standard sales pitch with state officials.
*They have to reveal their owners, place of business and the names of their salespeople.
Those requests may sound mild as a pussycat, but California officials say that the law has real claws.
In most states, a boiler room cannot be put out of business without going through the lengthy process of finding victims and proving fraud. By that time, the crooks have stolen tens of thousands of dollars and set up shop in another place.
But in California, simply failing to register is now ground for arrest. Some of the sales pitches being sent to the state are illegal on their face, Herschel Elkins of the Los Angeles attorney general's office told my associate, Virginia Wilson. Some boiler rooms are submitting different sales claims than the ones they're really using. All these new rules make it possible to prosecute even before complaints from consumers come in.
One area bothering Elkins: continued fraud against small-business and civic establishments.
Boiler rooms will call a doctor, a newspaper, a shoe store or a school and claim to be a regular supplier -- for example, of office material such as pencils and typewriter ribbons. The caller says that prices are going up, but if you order new supplies right now, you'll avoid the increase. You are then shipped inferior goods at a higher price, and many small businesses never notice.
Some con men simply send bills without delivering merchandise, counting on poor quality control to get the bills paid.
And here's Elkins' version of another old-chestnut game that's making the rounds again. "You'll get a call," he says, "from someone who says you've won either the Brooklyn Bridge, United Airlines, the Taj Mahal or a beautiful brooch, and all you have to do is buy 2,000 vitamins for $300." The true value of the vitamins is about $30 (that is, if you get anything at all), and the "beautiful brooch" is a bit of glass.
Sometimes you're offered this deal "free, except for a handling fee" -- and the fee itself is more than the brooch is worth. No telephone salesman ever gave anything away.
Cindy Davis of California's Better Business Bureau thinks that the boiler-room registration law already is beginning to work. Since the law took effect in January, she reports, not as many new boiler rooms are coming to the BBB's attention.
But nothing will be gained if California merely shoves the boiler rooms across state lines. All the states