Canadian Scam Shuttered

WASHINGTON, Dec. 18, 2001 -- A Canadian telemarketing operation that targeted elderly U.S. citizens, conned them into disclosing credit card numbers, and used legitimate Web site payment services to illegally bill the consumers' credit cards for merchandise they didn't order has been shut down by a U.S. District Court at the request of the Federal Trade Commission.

The FTC charged that Consumer Resource Services (CRS) obtained consumers' credit card information by running a telemarketing operation that supposedly offered free products or services such as a low interest rate credit card or access to unclaimed cash. The defendants told the consumers, many of them elderly, that their credit card numbers were required to receive free goods or services, but that their credit cards would not be charged. The defendants used the information they obtained from the consumers to establish accounts in the consumers' names with online payment services.

Online payment services act as intermediaries between consumers and businesses operating over the Internet. They let consumers use credit cards to pay for goods or services, even if the business does not accept credit card payment. Businesses that use online payment services register with the service, and the service provides a link to its own site. Consumers who want to purchase a product or service advertised on the business's Web site click on the link and are transferred to the online payment services site, where they provide identifying information, including their credit card number. The online payment service charges the consumer's account for the purchase and transfers payment, less a fee for its service, to the business offering the goods or services.

Rather than the consumers coming to their CRS Web site and clicking through to use an online payment service to pay for merchandise ordered, the FTC alleges that the defendants themselves clicked through. They then instructed the payment services to charge the consumers' credit cards, generally in the amount of $229, and transfer payment to them.

The FTC alleges that many consumers who were charged had not agreed to purchase anything and had never heard of the online payment service identified on their credit card billing statement. In fact, many of the consumers do not even have access to a computer or e-mail, although both are required to open an account with a payment service.

Many consumers who were charged for the CRS package did not receive any products from CRS, the FTC alleges. Consumers who did receive a CRS package found that it did not contain a credit card or the products promised by the telemarketers. Instead, the package contained a notebook with a few pages of literature, coupons, and a pamphlet of names, addresses, and telephone numbers of companies that may provide free product samples or coupons.

The FTC charged that the defendants' practices are unfair and deceptive and violate the FTC Act and the Telemarketing Sales Rule (TSR). The FTC has asked the court to permanently bar the defendants from violating the FTC Act and the TSR, order the defendants to give up their ill-gotten gains, and provide consumer redress.

The FTC complaint names 9094-5486 Quebec, Inc., doing business as Consumer Resource Services, Robin Gear, and Nando R. Caporicci, also known as Robert Caporicci. The defendants are located in Montreal, Quebec.

Back to the top | Consumer News

Consumer Affairs.Com is provided by ConsumerAffairs.com, Inc. in association with Joan E. Lisante LLC, licensed to practice in Virginia and the District of Columbia and the Law Offices of Horwitz, Horwitz & Associates, Ltd., licensed to practice in Illinois. ConsumerAffairs.com is an independent service not affiliated with any government agency. For more information see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice. ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof.