The FTC Continues to Pursue True "Robocallers"

According to a release published yesterday, The Federal Trade Commission and the Office of the Florida Attorney General have charged a web of related defendants based in Orlando with bombarding consumers with illegal robocalls in an attempt to sell them bogus credit-card interest rate reduction and debt relief services. In all, the complaint alleges the defendants’ robocall scheme bilked consumers out of more than $15.6 million since at least January 2013.

At the request of the agencies, a federal district court in Orlando has temporarily stopped the operation, collectively known as Life Management Services of Orange County, LLC, from making illegal robocalls and selling its services pending an upcoming hearing.

“This is the latest effort by the FTC and our international, state, and federal law enforcement partners to stop illegal robocalling operations that harass consumers day and night with unwanted calls,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

“These scammers use robocalls to hide their identities and exploit consumers,” said Florida Attorney General Pam Bondi. “Working jointly with the FTC, our actions to stop these schemes and hold the scammers responsible will not only keep Floridians from falling victim to these scams, but also protect consumers nationwide.”

According to the complaint, the defendants used generic names such as “Bank Card Services” and “Credit Assistance Program,” and falsely claimed to be a “licensed enrollment center” for major credit card networks like MasterCard and Visa. The alleged deception involved the defendants claiming that they would work with the consumer’s credit card company or bank to substantially and permanently lower their credit card interest rates.

The defendants allegedly claimed these “services” would save consumers thousands of dollars in a short period and allow them to pay off credit card balances three- to five-times faster. For these “services” consumers typically were required to make up-front payments of between $500 and $5,000. In reality, the defendants sometimes made a rudimentary attempt to contact the consumer’s credit card company, but consumers report that defendants’ were almost never able to obtain the promised rates or savings, the agencies charge.

The complaint alleges that the defendants also pitched a bogus credit card debt-elimination service, promising consumers that they could access money from a government fund to pay off consumers’ credit card debt in 18 months. For these “services” the defendants charged consumers between $2,500 and almost $20,000 up front. In reality, no such government fund exists, and consumers who paid defendants’ up-front fee wound up deeper in debt with damaged credit scores and higher interest rates and late fees, according to the complaint.

In bringing the case, the agencies charged the defendants with violating the FTC Act, the Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act. The FTC and Florida AG’s Office are seeking to permanently stop the conduct and secure money for consumer refunds. A complete list of the defendants can be found in the agencies’ complaint.

This latest case marks the 39th action taken since January 2015 as part of a coordinated multinational enforcement effort to halt robocall operations.

The latest law enforcement action comes as the FTC and its international partners seek to forge a stronger alliance to combat the nuisance of illegal robocalls. The FTC today also issued a new consumer education document that provides information about how consumers can block unwanted telephone calls.

insideARM Perspective

We’ve all gotten these calls. They truly embody the term “robocall,” and they have caused havoc for those who have legitimate reasons to contact people. Consumers and businesses alike will no doubt applaud this action. However, I wonder whether it will make a dent in the problem.