The way the these scams work is there are companies that manage the Caller ID database. Whenever a call is placed your phone company uses one of these databases in order to display the incoming call on your phone (Caller ID). Your phone company pays these companies for the use of their caller ID database.
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From the Verizon site:
Caller ID shows the name and number of incoming calls. Caller information will appear between the first and second rings on a customer-provided display device or display telephone, giving you the opportunity to screen your calls before you answer. Caller ID will also store names, numbers, dates and times of incoming calls (storage capacity varies with your display device model).
The name or number of the caller may not be displayed for every incoming call. In some cases, you will see a message on your Caller ID display unit instead of the name and number of the caller. The exact wording of the message may vary depending on the display unit you use. "Out of Area" or "Unavailable" messages may appear for calls made outside specially equipped areas, calls made through an operator, and for certain telephone numbers for which Verizon does not purchase Caller ID information. "Private" or "Anonymous" messages may appear for calls made by people who have blocked the display of their telephone information.
Caller ID works automatically; you do not have to activate or deactivate this calling feature.
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Take note of the statement "certain telephone numbers for which Verizon does not purchase Caller ID information".
It's cheaper for them to pay another company than maintain the caller ID database themselves. Your phone company is billed, a fraction of a penny per access to the database, each month by these companies based on how many times they accessed the caller ID database. You pay extra each month to cover the cost for the phone company but you pay much more to the phone company then the phone company pays to the caller ID database companies.
So, the caller ID company makes millions by using telemarketing companies to auto-dial as many numbers as they can in a day. Each time the auto-dialer finds a match in the caller ID database it charges the phone company for the use of their database. The phone company makes millions by charging more for their service and consumers lose millions because we are paying the added cost.
It's a scam. This is why the Do Not Call list is useless. The phone companies have bought off the politicians to not enforce the laws. Think about it. If the NSA can track every phone call made and find a terrorist in the haystack don't you think they can track down a company that makes millions of calls a day in violation of the Do Not Call list?
As far as the free vacation or lower interest on your credit cards, if they get a sucker on the line to bite that's just a bonus. The real money is in the caller ID database fees.
I personally have a fax machine connected to my line that picks up on the 4th ring. It has reduced the number of calls I receive considerably.
Hi, former phone company guy here. There's a number of blatant inaccuracies in your post. When we say the phone company subscribes to a Caller ID database they're subscribing to what is known as a CNAM database, which is strictly name information. This has nothing to do with the number. The number gets passed on calls between carriers regardless. The carrier receiving the call does a lookup in their CNAM database, or one they've subscribed to. In the case of Verizon they operate their own database, which is quite substantial might I add. Your conspiracy theory is interesting, but nevertheless incorrect. You don't have the 3rd party CNAM database operators paying telemarketers to make calls. Any CNAM DB operator that hard up for money wouldn't be used by carriers of any worth or size in the first place. That means they'd be stuck with the smaller carriers as customers. Those carriers don't have enough traffic to where such a scam would even be feasible.
Drat - didn't see the phone number and picked up because it said Member Services. No one on line - hung up with no message. Into the call blocker this goes!