FTC Cracks Down on Robocalls

The Federal Trade Commission files lawsuits and temporary restraining orders against three companies that it claims made so-called robocalls hawking worthless credit card interest-rate reduction programs for fat up-front fees.

The Federal Trade Commission has targeted three companies that allegedly made so-called robocalls "to sell worthless credit card interest-rate reduction programs for hefty up-front fees of as much as $1,495," the agency announced Dec. 8. In addition to the lawsuits, the FTC obtained temporary restraining orders against the companies pending trial.

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"According to the three FTC complaints, Economic Relief Technologies, LLC, Dynamic Financial Group (U.S.A.) Inc. and JPM Accelerated Services (JPM) and related defendants made illegal prerecorded robocalls to consumers, using names like 'card services,' 'credit card services' or 'account services.' The robocalls allegedly claimed the defendants' services could lower the interest rate on consumers' credit cards. In each case, consumers who pressed 1 after hearing the automated call were transferred to live telemarketers who allegedly misrepresented that consumers could dramatically lower the rates on their credit [cards]. ... The defendants then falsely stated that if consumers did not save a 'guaranteed' amount-typically $2,500 or more-they could get a full refund of the up-front fee. However, after securing the fee, the defendants allegedly did not negotiate lower rates on behalf of consumers and provided few refunds to those who were dissatisfied with the service," the FTC news release said.

"The FTC has heard the public outcry against robocalls and has taken swift action to stop them. During these difficult economic times, the last thing anyone needs is to be bombarded by robocalls pitching worthless interest-rate reduction programs," FTC Chairman Jon Leibowitz said in a statement. "The lawsuits announced today are not the first, nor will they be the last, that the agency brings to protect consumers from intrusive, illegal and deceptive telemarketing robocalls."
The news release continued, "The three complaints announced today follow two filed in May that led to court orders stopping other telemarketers from using robocalls with deceptive claims about extended auto warranties. Since Sept. 1, 2009, virtually all robocalls have been illegal, unless the recipients have provided written authorization to receive the prerecorded calls."
The lawsuits claim the defendants violated the law "by making illegal robocalls to consumers, and that their deceptive sales pitches violated the FTC Act and the FTC's Telemarketing Sales Rule. Additional charges include: 1) calling consumers whose phone numbers are on the National Do Not Call Registry; 2) calling consumers who had previously asked not to be called; 3) failing to transmit their caller ID information, as required; 4) 'spoofing' or masking their caller ID information; 5) failing to promptly identify themselves, the purpose of their call, and/or the nature of the goods or services they were selling; 6) improperly abandoning calls; and 7) failing to make required disclosures in their robocalls."