COURT BARS COMPANY FROM BULLYING ELDERLY TO PAY FOR MEDICAL ALERT DEVICES

FROM:  U.S. FEDERAL TRADE COMMISSION

Court Bars Brooklyn Company from Using Threats and Intimidation to Coerce Elderly Consumers into Paying for Unwanted Medical Alert Devices
Court Orders Defendants to Pay $3.4 Million in “Unjust Gains”

At the Federal Trade Commission’s request, a U.S. district court has prohibited Jason Abraham, a repeat offender, and his company, Brooklyn-based Instant Response Systems (IRS) from calling elderly consumers and bullying and tricking them into paying for unordered medical alert devices. The court also imposed a $3.4 million judgment against the defendants for their misconduct, which may be used to provide refunds to defrauded consumers.

“Instant Response Systems lied to older people to get them to pay for medical alert systems they didn’t order and didn’t want,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Their high-pressure, deceptive phone pitches were illegal, and they violated the do not call rules to boot.”

According to the FTC’s complaint, filed in March 2013, telemarketers for IRS called elderly consumers – many of whom are in poor health and rely on others for help with their finances – and pressured them into buying a medical alert service consisting of a pendant that supposedly would allow them to get help during emergencies. In many cases, IRS falsely claimed during sales calls that consumers had bought the service previously and owed the company hundreds of dollars.

The company shipped fake invoices and unordered medical alert pendants to consumers without their consent, repeatedly threatened them with legal action to coerce them into paying, and subjected them to repeated verbal abuse. The FTC also charged the defendants with illegally calling consumers whose phone numbers are on the National Do Not Call (DNC) Registry.

The court order issued with the summary judgment announced today imposes both conduct and monetary provisions against Abraham. First, it bars him from violating the FTC Act and the FTC’s Telemarketing Sales Rule by making any false and misleading statements to induce consumers to make payments, using threats or intimidation to coerce payment, and from calling consumers whose phone numbers are on the DNC Registry. It also bars him from violating the FTC’s Unordered Merchandise Statute. Finally, the court ordered Abraham to pay a judgment of $3,432,462, the amount of the “unjust gains” he received through the scheme.

In its ruling, the court stated, “There is no genuine dispute that [the] defendants, in letters and phone calls, made material misrepresentations that consumers ordered medical alert services and owed IRS money when, in fact, they did not.” The court also found that Abraham “knowingly made misrepresentations to hundreds of consumers over a five-year period, all while subject to a permanent injunction issued in 2003 . . . which prohibited him from such conduct.”

The summary judgment resolves the FTC’s charges against Jason Abraham. Last year, the court entered a default judgment against Abraham’s company, Instant Response Systems, LLC that resolved the FTC’s charges against the company and orders injunctive and monetary relief similar to the summary judgment order against Abraham.

The FTC appreciates the assistance of the New York State Attorney General’s Office and the U.S. Postal Inspection Service, in this case.

FTC, FLORIDA AG SETTLEMENT STOPS ROBOCALL OPERATION THAT PUSHED SALES OF MEDICAL ALERT DEVICES TO SENIORS

FROM:  U.S. JUSTICE DEPARTMENT
Settlement with the FTC and Florida Attorney General Stops Operations that Used Robocalls to Fraudulently Pitch Medical Alert Devices to Seniors

A settlement obtained by the Federal Trade Commission and the Office of the Florida Attorney General permanently shuts down an Orlando-based operation that bilked seniors by using pre-recorded robocalls to sell them supposedly free medical alert systems.

The settlement order bans the defendants from making robocalls, prohibits other telemarketing activities, and bars them from making misrepresentations related to the sale of any product or service. The order includes a judgment of nearly $23 million, most of which will be suspended after the defendants surrender assets including cash, cars, and a boat.

”This case is a great example of how federal and state law enforcement can work together to stop fraudulent telemarketing targeting older consumers,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “The FTC will continue to work with its state partners to protect senior citizens from pernicious schemes like this one.”

“We must do everything within our power to protect Florida’s consumers. The scheme we have stopped allegedly targeted Florida’s senior citizens, and we, along with our Federal Trade Commission partners, have held these individuals accountable,” said Attorney General Pam Bondi.

According to the joint agency complaint, announced in January, the defendants violated the FTC Act, the Commission’s Telemarketing Sales Rule (TSR), and Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) by blasting robocalls to senior citizens falsely stating that they were eligible to receive a free medical alert system that was bought for them by a friend, family member, or acquaintance. Many of the consumers who received the defendants’ calls were elderly, live alone, and have limited or fixed incomes.

Consumers who pressed one (1) on their phones for more information were transferred to a live representative who continued the deception by falsely saying that their medical alert systems are recommended by the American Heart Association, the American Diabetes Association, and the National Institute on Aging. In addition, the telemarketers falsely said that the $34.95 monthly monitoring fee would be charged only after the system has been installed and activated. In reality, consumers were charged immediately, regardless of whether the system was activated or not.

The court order settling the agencies’ charges also imposes a judgment of $22,989,609, the total amount consumers paid for monthly monitoring services for their medical alert devices. The judgment will be suspended as to all of the settling defendants once the individual defendants turn over cash and other assets valued at about $79,000, including $24,000 that was transferred in violation of a court-ordered asset freeze.

Assets that will be sold include a 2008 BMW, a 1984 Hans Christian sailboat, a 2004 Mercedes, and a 2008 Lincoln Navigator. In addition, defendant Joseph Settecase is subject to a second judgment of $39,300, which will not be suspended. This judgment reflects the funds that Settecase retained after selling his Ferrari in violation of the asset freeze and transferring a portion of the proceeds to another defendant.

The defendants subject to the settlement include: 1) Worldwide Info Services, Inc., also doing business as (d/b/a) The Credit Voice; 2) Elite Information Solutions Inc., also d/b/a The Credit Voice; 3) Absolute Solutions Group Inc., also d/b/a The Credit Voice; 4) Global Interactive Technologies, Inc., also d/b/a The Credit Voice Inc.; 5) Global Service Providers, Inc.; 6) Arcagen, Inc., also d/b/a ARI; 7) American Innovative Concepts, Inc.; 8) Unique Information Services Inc.; 9) National Life Network, Inc., and their principals 10) Michael Hilgar; 11) Gary Martin; 12) Joseph Settecase; and 13) Yuluisa Nieves.

One defendant, Live Agent Response 1 LLC, also d/b/a LAR, has not settled, and the FTC and Florida AG are seeking a default judgment against it. In May, the parties stipulated to the dismissal of The Credit Voice, Inc. as a defendant.

The FTC and Florida Attorney General’s Office appreciate the assistance of the following agencies, offices, and organizations in helping to investigate and bring this case: 1) the Indiana Office of the Attorney General; 2) the Minnesota Office of the Attorney General; 3) the Florida Department of Agriculture and Consumer Services; 4) the Better Business Bureau Serving Eastern Missouri and Southern Illinois; 5) the American Heart Association; 6) the American Diabetes Association; 7) the National Institute on Aging;  8) the United States Postal Inspection Service, including its Atlanta, Boston, and Houston divisions; and 9) the Seminole County Sheriff’s Office, Financial Crimes Task Force.