The tools that have made telemarketing a $100 billion-a-year industry are also threatening the industry. Automatic dialing machines that allow systematic phone calling and computer-assisted ``victim'' identifiers enable fraudulent telemarketers to hone in on their targets more quickly and cheaply.
And as the relationship between businesses and their customers grows more distant, the reach and operating speed of con artists has advanced incredibly, says Christine Milliken, executive director and general counsel of the National Association of Attorneys General.
Although phone companies are developing services to allow customers to trace bothersome calls and block future calls from the same number, the companies are ``not allowed to discriminate against prospective customers,'' says Allan Northcutt at Southwestern Bell Corporation.
That means that to track and halt some of the elaborate schemes being used to swindle millions of Americans out of their savings, federal and state agents must constantly monitor newspaper and magazine advertisements, telemarketing firms, and investment offers.
Until recently, such fraud has been treated as a state matter. But without a national remedy for what is a national problem, investigations will merely push fraud from state to state, says Jane King of the National Consumers League.
Efforts to develop national policy seem to be heading into a turf battle. Legislation has already passed the US House of Representatives that would give attorneys general the right to sue those involved in an alleged ``boiler room'' scam in federal court. It also allows private parties, such as financial institutions, to bring suit under the same Federal Trade Commission Act.
This would be especially helpful to credit card companies, which have lost millions of dollars to fraudulent telemarketers, says Dennis Brosan, security director of Visa International.
But this bill and two similar ones pending in the Senate face opposition from the Federal Trade Commission, as well as retail merchants and direct marketers.
The FTC would rather maintain control of the task, even though it has civil, not criminal, jurisdiction. The commission is looking to expand its authority in that area - for example, going after the money swindled and attaining certain information without having to give advanced notice.
Since 1983, the FTC has brought 29 civil cases, and six criminal cases, to federal court, with aggregate sales topping $650 million, says Mike McCarey with the FTC's service industry practices department. ``We have obtained judgments of over $80 million in redressing scam victims.''
Meanwhile, the attorneys general are looking to escape what they see as handcuffs on their ability to act in national fraud cases.
In less than two years, state attorneys general have filed about 150 cases, says Elena Boisvert, business regulations counsel at the National Association of Attorneys General.
Telemarketers, as well as credit card companies and banks, support the idea behind the various bills, but protest those provisions that grant federal authority to the states.
``We're most concerned that all an attorney general has to do to have a nationwide action against fit telemarketing firms is to have alleged harm against the citizens of the state. ... We don't think that's enough,'' says Richard Barton, senior vice-president of government affairs at the Direct Marketing Association.
And legal counsel for the group, which testified before Congress last month, consider the present bills ``cheap justice'' - an effort to ``go out and deputize everyone who has a gun'' and further poison the business climate.
Other provisions being pushed in the House bill include an order that would make the FTC draft a telemarketing rule to protect consumers.
``Americans presume, after the spate of consumer protections in the early '70s, that almost every activity is protected,'' says Ms. King. ``But those of us who deal with it every day know there are loopholes all over the place.''
No legislation is going to stop fraud, but it will help states work together and move more quickly, says Ben Cohen, senior counsel to the House Energy and Commerce Committee, which originated the bill.