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Ohio Sues Firm For Helping Telemarketing Fraud

April 7, 2006
Ohio Attorney General Jim Petro today sued a Columbus check processor for helping telemarketers in Canada siphon money out of Ohio consumers' bank accounts in violation of the state's consumer protection laws.

Petro filed the lawsuit against Thomas Cimicato, of Gahanna (doing business as Integrated Check Technologies, of Columbus) and an allied Columbus firm, Check Free Recovery, Inc. (doing business as Collect-A-Check, Inc.), accusing them of numerous violations of the state's Consumer Sales Practices Act and the federal Telemarketing Sales Rule.

"Perpetrators of telemarketing fraud use manipulation and misrepresentation to persuade victims to part with their money or give up personal information," Petro said. "Many consumers don't realize that providing checking account information over the telephone can lead to unauthorized withdrawals from their accounts. Our lawsuit alleges ICT gave substantial support to fraudulent telemarketers and knew -- or should have known -- that they were acting illegally."

The Attorney General asked the court for an injunction against the defendants, civil penalties of $25,000 for each consumer law violation and $11,000 for each telemarketing sales rule violation, and financial repayment to all Ohio consumers wronged by the defendants.

Petro said ICT provided payment processing services for at least 57 telemarketing company clients, 34 of which are located in greater Montreal, an area known to have a heavy concentration of fraudulent-telemarketing boiler rooms. The FTC's Consumer Sentinel database contains at least 235 consumer complaints against the 57 firms, and Petro's office has 35 complaints on record about firms on the list.

According to the Attorney General, ITC took personal banking information that its telemarketer clients wheedled from consumers and used it to withdraw money from the consumers' accounts.

The company often made paper-check withdrawals of hundreds of dollars at a time without consumers authorizing or even knowing about them, an illegal practice known as "slamming," Petro said. He added that ITC withdrawals that may have been authorized by consumers were nevertheless illegal if they were based on deceptive telemarketing sales pitches by its client firms.

The Attorney General said ITC was found to be in possession of sales-pitch scripts used by its clients that patently violated federal and state consumer protection laws -- they masked the identity of the seller and misrepresented goods and services being sold, for example -- and based on that, ICT should have known it was aiding in telemarketing fraud.

The Attorney General's lawsuit charges ITC with assisting and facilitating deceptive telemarketing acts or practices, processing bank debits on behalf of telephone solicitors who are not registered and bonded, processing bank debits on behalf of telephone solicitors who do not comply with provisions of the telephone solicitation law, and processing bank debits that are unauthorized by the account holder, all violations of state law.

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