The third and final installment of the HBO documentary series Telemarketers reveals the lengths the industry has gone to in creating a billion dollar scheme—and how the success of telemarketing is intertwined with law enforcement, artificial intelligence, and the political system.
The series, produced by Benny Safdie, Josh Safdie, Danny McBride, and David Gordon Green, goes into the murky world of telemarketers, led by filmmaker Sam Lipman-Stern and his former colleague, Pat Pespas. The two met in the early 2000s while working at Civic Development Group (CDG)—at one point the biggest telemarketing fundraising company in the U.S.
Lipman-Stern and Pespas began filming their workplace, which was far from a normal office job. The company employed several ex-convicts to call citizens and solicit donations on behalf of charities and nonprofits and did not seem to care about the drug use and other chaos that ensued in the office. In its first two episodes, Telemarketers uncovers the scam CDG was running—callers would convince donors to hand over money but only about 10% of the donations would go to the intended charity. CDG pocketed the rest. In 2010, the company would face the biggest consumer protection lawsuit in U.S. history for defrauding donors, although copycat organizations would follow suit.
“These organizations are operating just on the borderline of illegality,” Detective Capt. Robert Rowan of the Clifton Police Department says in the documentary. “They disappear and reappear under a different name. It’s pretty hard to track them down once the money is donated, it’s very difficult to get it back.”
Lipman-Stern and Pespas were determined to take down the telemarketing industry from the inside out, but the project was put on hold around 2012, when Pespas disappeared during filming. In 2020, the two reconnected and realized the world of telemarketing has only gotten wilder—incorporating AI to impersonate the voices of callers and including even less regulated charities. They began filming again, and episode three spins forward, showing what telemarketing looks like in 2023.
“It’s more wild west than ever,” Lipman-Stern tells TIME. “There’s less regulation, more phone calls and more money. It’s crazy right now.”
AI and PACs in telemarketing today
As Lipman-Stern and Pespas discover, the telemarketing industry is still in effect—its model has just evolved. When they were working at CDG, almost anyone could be hired at the company and go mostly unmonitored, as long as they brought in money. “The model seemed to be that you would hire a telemarketing company and the telemarketing model would hire ex-convicts that know how to get money out of people and aren’t going to say anything,” Lipman-Stern says.
Fast forward a couple decades, and the telemarketers themselves are a little different. In episode three of Telemarketers, Pespas goes undercover and gets hired at another telemarketing company to find that in the emergence of AI, robo calls have taken over, impersonating the voices of past telemarketers—some of whom are even dead.
And modern-day telemarketing has moved beyond calling just on behalf of charities and nonprofits, according to the documentary. Now, it includes the world of Political Action Committees (PACs), another relatively unregulated industry. The Federal Election Commission oversees PACs, while the Federal Trade Commission oversees the actions of telemarketers.
In the documentary, former FTC commissioner Ann Ravel says PACs will continue to face few regulations because of the involvement of politicians who benefit from them. The conflict of interest has prompted the FTC to call on Congress to intervene on creating regulations for telemarketers and protections for consumers at the receiving end of their calls.
The Telemarketers team has also joined the call for more government intervention on telemarketing companies. Episode 3 shows a passionate Pespas at Connecticut Sen. Richard Blumenthal’s office, asking him to help arrange a congressional hearing to expose the inside world of telemarketing. (Blumenthal, as shown in the series, went after telemarketers early in his political career.) In the episode, Blumenthal is shown cutting the meeting short, saying his office will be in touch to figure out next steps. Lipman-Stern says Blumenthal’s team never got back to them.
The involvement of police in telemarketing
In Telemarketers, Lipman-Stern and Pespas act as “independent journalists,” conducting interviews and digging through legal documents to find out more about the charities they were calling on behalf of during their time at CDG. They find that the FOP unions were directly involved in creating CDG’s telemarketing scheme—aware of the scripts, lying, and manipulation involved in raising money for them. “We knew ex-convicts were raising money for the police, but we discovered the police are involved in the fraud too,” says Lipman-Stern. “That was pretty shocking.”
The police involvement was brushed under the rug during the dismantling of CDG, says Lipman-Stern. In 2010, the FTC, which is responsible for protecting citizens from “deceptive for-profit fundraisers and sham nonprofits,” sued CDG and they were ordered to pay over $18 million dollars in fines.
It was widely assumed that the operators of CDG and their telemarketer employees, who were instructed to sound like a caricature of a cop when calling on behalf of police unions, were the main culprits of the scheme. But as Telemarketers reveals, via documents from the FTC lawsuit against CDG, a state police union like the Indiana State FOP not knew about the telemarketing campaign tactics, but helped facilitate a loophole where telemarketers presented themselves as “consultants” and said 100% of donation proceeds were going to the police union–when they were not.
According to the documentary, organizations like the Connecticut’s FOP requested that this model be used, while several other state FOPs signed off on the language used to coerce donors into giving money for the families of “fallen officers,” despite an insignificant fraction of funds going to cause. The majority of the funds that went to the FOP were used for union lobbying, conventions, and leisure activities like fishing trips, says Lipman-Stern.
Even though only a percentage of the donations went to the police unions, the money they received was a significant enough amount that it was worth it for them to insist on the fundraising method. “Do we get rich from them? Yes. Does their union get rich off of us? Yeah.,” said an anonymous telemarketer in the documentary.
The FOP did not see any penalties from the FTC for its involvement in the telemarketing scheme. Despite the investigation, the FTC has faced challenges in taking down the entire telemarketing industry—which seems to constantly find a new way through loopholes and marketing on behalf of industries outside of the FTC’s jurisdiction, like PACs.
Even with the bombshell revelations of Telemarketers, “finding out that maybe those unions are too powerful to take down was definitely shocking,” Lipman-Stern says.
Making real reform is an uphill battle but through Telemarketers, the filmmakers expose viewers to the dark world of telemarketing through their personal experiences. “The goal is to educate through this film,” says Lipman-Stern. “Americans are very generous and hopefully some regulation of this world comes from this so that these donations can go directly to good causes.”
