At the request of the Federal Trade Commission (FTC), a federal district court in Chicago has shut
down an international robocall ring that allegedly conned consumers out of $995
each. According to FTC, the ring promised that it would reduce consumers'
credit card interest rates, but provided little or nothing in return.
As part of its crackdown on frauds, the FTC charged that the
robocall ring made bogus promises that it would provide refunds to consumers if
they did not save at least $2,500. When consumers called to complain, however,
the robocallers simply disappeared, the FTC charged. The commission alleges
that this company has defrauded nearly 13,000 consumers out of almost $13
million from this scheme.
Boiler room operations
According to the FTC, since at least 2007, the defendants
allegedly used at least 10 different company names, including AFL Financial
Services, when pitching the service. The defendants, who are in Toronto,
Canada, and the Rochester, New York, area, operated two telemarketing boiler
rooms in Orlando, Florida.
They employed illegal robocalls to contact consumers, and
then claimed that for $995 they would substantially reduce credit card interest
rates and enable consumers to get out of debt three to five times faster. They
also falsely suggested that the savings from the lower interest rates would pay
for the service.
In reality, the defendants failed to lower consumers'
interest rates, and consumers did not save the $2,500 promised by the
defendants or receive refunds, the FTC alleges.
Charges filed
The complaint charges that the misrepresentations
violated the FTC's Telemarketing Sales Rule and the FTC Act. It also charges
that the defendants called consumers whose numbers are on the National Do Not
Call Registry and made illegal robocalls.
Charged in the complaint are Direct Financial Management
Inc.; 2194673 Ontario Inc., doing business as (d/b/a) The Elite Financial
Group; F&F Payment Processing Inc.; Bajada Management Group Inc.; David D.
Richards; Baird B. Fisher; Jacqueline M. Fisher; and Joseph B. Foley.
On November 8, 2010, Judge Joan H. Lefkow entered a temporary
restraining order with an asset freeze, halting the defendants' operations
pending trial and appointing a receiver over the two United States corporate
defendants. In filing its complaint, the FTC is seeking to stop permanently the
defendants' allegedly illegal conduct and return their ill-gotten gains to
defrauded consumers.
The FTC brought the case in cooperation with the Ministry of the Attorney General of Ontario, Civil Remedies for Illicit Activities Office. The Ministry simultaneously filed a separate lawsuit in Ontario seeking assets for consumer redress to victims in the United States and Canada.
