SPAM TEXT MESSAGE, ROBOCALLING, MOBILE CRAMMING SCHEME DEFENDANTS TO PAY $10 MILLION TO SETTLE FTC CHARGES

FROM:  U.S. FEDERAL TRADE COMMISSION 

Defendants in Massive Spam Text Message, Robocalling and Mobile Cramming Scheme to Pay $10 Million to Settle FTC Charges

A series of defendants will pay approximately $10 million to the Federal Trade Commission to settle charges that they operated a massive scam that sent unwanted text messages to millions of consumers, many of whom later received illegal robocalls, phony “free” merchandise offers, and unauthorized charges crammed on their mobile phone bills.

The settlement marks the completion of a major effort by the FTC to crack down on the senders of unwanted text messages offering consumers “free” gift cards to retailers such as Best Buy, Walmart and Target. The messages contained links to websites that led consumers through a process that the FTC alleges was designed to get consumers’ personal information for sale to marketers, their mobile phone numbers to cram unwanted charges on their bill, and to drive them to paid subscriptions for which the scammers received affiliate referral fees.

“The operators of this scam bombarded consumers for months with deceptive text messages offering ‘free’ items, but the costs to consumers were very real – including the misuse of their personal information to cram unwanted charges on  their phone bills,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “I am pleased that these scammers will be forced to turn over millions of the dollars they took from consumers and banned from repeating these actions in the future.”

The settlement resolves the FTC’s allegations against three groups of defendants:

The first set of defendants is required to pay the FTC $7.8 million. The FTC alleged that this group of defendants was responsible for millions of illegal text messages, made deceptive claims about “free” merchandise, was responsible for unauthorized charges on mobile phone bills, and assisted and facilitated the sending of illegal robocalls. Under the terms of the settlement, these defendants will be banned from sending consumers unwanted text messages, as well as from placing charges of any kind onto a consumer’s telephone bill, whether landline or mobile. The settlement also bans the defendants from misrepresenting whether a product is free through a text message or webpage, and also requires the defendants to ensure that any affiliates working for them abide by the same provisions. In addition, the settlement requires the defendants to obtain consumers’ express informed consent before billing them and bans them from participating in illegal telemarketing. The defendants in this settlement are Acquinity Interactive, LLC; 7657030 Canada Inc., Garry Jonas, Gregory Van Horn, Revenue Path E-Consulting Pvt, Ltd.; Revenuepath Ltd.; and Sarita Somani.

The second set of defendants is required to pay the FTC $1.4 million. The FTC alleged that this set of defendants was responsible for cramming unauthorized charges on consumers’ mobile phone bills. Under the terms of the settlement, the defendants will be banned from placing charges of any kind on consumers’ telephone bills, as well as being banned from making any misrepresentations to consumers about a product or service, including the cost or a consumer’s obligation to pay. In addition, the defendants will be required to obtain consumers’ express informed consent before billing them for any good or service. The defendants in this settlement are Burton Katz, individually and also doing business as Polling Associates Inc. and Boomerang International, LLC, and Jonathan Smyth, individually and also doing business as Polling Associates Inc.

In the third settlement, an $8 million judgment is being suspended due to the defendants’ inability to pay, after they turn over available assets. The FTC alleged that this set of defendants was responsible for making millions of illegal robocalls. Under the settlement, the defendants are required to pay the FTC $100,000, as well as the surrender value of a life insurance policy and proceeds from the sale of: a 2013 Cadillac Escalade, two motorcycles, and a real estate holding in Southern California. The settlement also bans the defendants from illegally telemarketing consumers through robocalling. The defendants in this settlement are Firebrand Group S.L., LLC, Worldwide Commerce Associates, LLC, and Matthew Beucler.

In addition to these settlements, the Commission dropped charges against two defendants in the cases, Joshua Greenberg and Scott Modist.

The Commission vote approving the proposed stipulated final orders was 5-0. Judge Robert N. Scola, Jr. of the U.S. District for the Southern District of Florida entered the stipulated final orders on Oct. 16, 2014

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

"HI I'M RACHEL" ROBOCALL CREDIT CARD RATE-REDUCTION SCAMS SHUT DOWND

FROM:  FEDERAL TRADE COMMISSION 
Deceptive Robocallers Permanently Shut Down In FTC Settlements

Companies Behind Credit Card Rate-Reduction Scams Will Be Banned From Telemarketing, Robocalling
The Federal Trade Commission has continued its crackdown on illegal robocallers, with two more companies agreeing to settle charges that they used prerecorded calls to trick consumers into deceptive credit card interest rate reduction scams.

Under separate proposed settlements, the defendants behind Treasure Your Success and Ambrosia Web Design will be banned from telemarketing and delivering robocalls.  They also will be permanently prohibited from advertising, marketing, promoting, or offering for sale any debt relief product or service, or assisting others in doing so.

The FTC filed the initial cases against the operators of both companies in 2012 as part of a joint-agency crackdown on companies and individuals responsible for making millions of illegal “Rachel” robocalls pitching credit card rate-reduction services.

Treasure Your Success

In its original complaint against Treasure Your Success, the FTC alleged that the defendants tricked consumers into paying up-front fees for as much as $1,593, using deceptive offers for credit card interest rate reduction services.

The complaint named two individuals, Willy Plancher and Valbona Toska, as well as their three companies, WV Universal Management, Global Financial Assist, and Leading Production.  The defendants began marketing credit card interest rate reduction services in 2010.  According to the FTC’s complaint, the defendants lured consumers by telling them they could substantially reduce their credit card interest rates, down to as low as three percent, in many instances.  After collecting the upfront fees, however, consumers typically failed to get any interest rate reduction or any savings at all.

In November 2012, at the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending further court proceedings. The FTC subsequently amended its complaint to include new defendants and additional counts.

In addition to the other provisions of the settlement, the proposed order holds the defendants liable for $2,032,626, based on the amount of consumer injury in the case. Due to the inability of the individual defendants to pay redress, the monetary judgment has been suspended. However, if the defendants misstate or fail to disclose any of their material assets, the full amount of the judgment will be immediately due and payable.

The case against Treasure Your Success was filed in the U.S. District Court for the Middle District of Florida, Orlando Division. Litigation continues against: HES Merchant Services Company, Business First Solutions, VoiceOnyx Corp., Hal E. Smith, Jonathon E. Warren, Ramon Sanchez-Ortega, Universal Processing Services of Wisconsin, and Derek Depuydt.

Ambrosia Web Design

According to the FTC’s complaint, the Ambrosia Web Design defendants delivered prerecorded calls that urged consumers they called to “press one” if they were interested in credit card interest rate reduction services.  Consumers who pressed one were connected to a telemarketer who promised to get them very low interest rates or, in some cases, specific amounts of interest savings.  The defendants often deceived consumers into thinking defendants were affiliated with a government program.  If consumers agreed to sign up, the telemarketer got their credit card information, often charging an illegal advance fee before providing any service, the FTC alleged.

The FTC alleged that defendants then typically failed to deliver on their promises. In addition, the FTC charged defendants with failing to disclose their purported no-refund/no cancellation policy and billing some consumers without their express authorization.  Finally, the FTC alleged defendants illegally called many phone numbers on the National Do Not Call Registry.

In June 2013, the FTC amended its original complaint to add charges of credit card laundering in violation of the agency’s Telemarketing Sales Rule.  According to the FTC, in many cases, the defendants laundered credit card payments by processing them for other telemarketers through the Ambrosia defendants’ own merchant accounts; and arranging for other merchants to process credit card payments for the defendants through their accounts.

In addition to the bans on outbound telemarketing and robocalling, the proposed settlement order:

Bans the defendants from using certain payment processing methods, such as remotely created checks, that are often used to conduct fraud;
Prohibits the defendants from making misrepresentations regarding any “financial products or services;” and
Prohibits the defendants from misrepresenting the efficacy of a product or service.
The proposed settlement requires the defendants to liquidate virtually all of their assets, including a valuable watch and a sports memorabilia collection.  It also includes a judgment of $8.3 million, which will be suspended if defendants comply with the terms of the settlement.

The settlement resolves the FTC’s charges against: 1) Ambrosia Web Design, LLC, also doing business as AWD; 2) Concord Financial Advisors LLC; 3) CAM Services Direct LLC; 4) AFB LLC; 5) Western GPS LLC; 6) Chris Ambrosia, individually and as a manager of Ambrosia Web Design LLC and CAM Services Direct LLC; and 6) LeRoy Castine, also known as Lee Castine, individually and as a manager of Ambrosia Web Design LLC, Concord Financial Advisors LLC, AFB LLC, and Western GPS LLC.

The case against Ambrosia Web Design was filed in the U.S. District Court for the District of Arizona.

The Commission vote approving the proposed settlements in both actions was 4-0.

Information for Consumers

The FTC has tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one.  See ftc.gov/robocalls for more information.

TELEMARKETER BANNED FROM SELLING DEBT RELIEF SERVICES

FROM:  FEDERAL TRADING COMMISSION 
FTC Settlement Bans Marketer from Selling Debt Relief Services, Telemarketing, and Robocalling

Under a settlement with the Federal Trade Commission, a telemarketer who allegedly defrauded consumers with false promises of debt relief and charged them without their consent is banned from selling debt relief services, telemarketing, and making robocalls.
The settlement resolves a complaint the FTC filed last year against Jeremy R. Nelson and four companies he controlled. The agency alleged that they violated federal law by making false claims, causing unauthorized debits from consumers’ bank accounts, and illegally charging advance fees.

The FTC also alleged that the defendants called phone numbers on the National Do Not Call Registry, called consumers who had told them not to call, failed to transmit caller identification to consumers’ caller ID service, delivered pre-recorded messages without prior written consent, repeatedly called consumers to annoy them, and delivered pre-recorded messages that failed to identify the seller, the call’s purpose, and the product or service.

In addition to the ban on debt relief sales, telemarketing, and robocalls, the proposed settlement order permanently prohibits the defendants from misrepresenting material facts about any products and services, making unsubstantiated claims, charging consumers’ accounts without their express informed consent, collecting money from customers who agreed to purchase debt relief products or services from the defendants, selling or otherwise benefitting from consumers’ personal information, and failing to properly dispose of customer information.

The order imposes a judgment of more than $4.6 million against the defendants. The judgment against Nelson will be suspended, based on his inability to pay, after he surrenders to the FTC bank accounts and investment assets frozen by the court. The full judgment will become due immediately if he is found to have misrepresented his financial condition.

For information on dealing with debt, read the FTC’s Knee Deep In Debt.

The Commission vote authorizing the staff to file the proposed consent order was 4-0. The consent order was filed in the U.S. District Court for the Central District of California.

NOTE: Consent orders have the force of law when approved and signed by the District Court judge.