In the largest telemarketing fraud crackdown in history, authorities in the United States and Canada filed more than 180 criminal and civil actions against companies that allegedly used deceptive tactics to sell everything from extended car warranties to magazine subscriptions.

The legal action -- spearheaded by the Federal Trade Commission (FTC) under the code name "Operation Tele-PHONEY" -- targeted 13 companies that allegedly duped more than 500,000 consumers nationwide through deceptive telemarketing schemes.

Consumers lost more than $100 million in these companies' various schemes, the FTC said. has received scores of complaints about one of the telemarketing companies named in last week's crackdown -- Publishers Business Services, which operates out of an office in Henderson, Nevada.

That company allegedly used deceptive and intimidating tactics to sell magazine subscriptions, according to the FTC.

"These defendants allegedly disguise their sales pitch as a survey, at the end of which they offer 'free' or low-cost magazine subscriptions,'" the FTC said in a written statement. "They send a bill weeks later, stating that consumers agreed to pay several hundred dollars for the subscriptions"


The FTC added: "When consumers complain or attempt to cancel, the defendants tell them that they are obligated to pay the bill and may not cancel because they entered into a 'verbal contract' during the survey call and the defendants have already paid the magazine publishers for the subscriptions. The defendants then attempt to extort payment by harassing the consumers at work, threatening to initiate collection actions, or threatening to submit derogatory information about them to the major credit bureaus."

Those actions mirror the complaints we've heard from consumers about Publishers Business Services.

"This company called my daughter who is not mentally stable and only 19 years old," Luanne H. of Durango, Colorado, told "They called her at work and harassed her and got information from her. She said she never chose to order magazines. Now they are trying to say she owes $700 plus dollars. I called and explained to them and said no one wants the magazines and to stop sending them."

The company refused, saying Luanne had pay to cancel an order her daughter never placed.

"They wanted $100 minimum to stop sending them," Luanne said. "I said we do not want your magazines and we will not pay you anything."

That's when the company resorted to scare tactics to force her daughter to pay, Luanne said.

"They stated they will turn her in to a collections agency and the judge will decide. This place is a huge scam and should be put out of business for preying on young people. I am sure they try to target elderly people, too. "

John S. of Chadwicks, New York, said the telemarketing company also tried to force him to pay for magazines he didn't order.

"I was called at workI work at a lumber department with many customers and power equipment. I was unable to hear the call. The next thing I know, I receive bill for $720 of magazines.

"I have called these people three times for cancellation," John said. "Today I was told this is not possible. When I asked for the contact information for someone who could take care of it, the customer service rep hung up the phone on me." contacted Publishers Business Services, but the company did not return our call.

Unordered goods

The other companies sued by the FTC included telemarketers that allegedly sent unordered household goods to consumers to those that offered phony tax rebates or prescription drug plans.

In some cases, the callers allegedly deceived consumers through the use of:

• Fraudulent sweepstakes pitches;
• Offers of free gifts;
• Promises that for an advance fee, consumers would be "guaranteed" to receive loans or credit cards. Those, however, never materialized or were useless.

The FTC said some companies named in the lawsuits allegedly used consumers' bank account information to bill them without their authorization, harassed them to pay for unordered goods, and violated the rules of the Do Not Call (DNC) Registry.

Besides Publishers Business Services, the FTC took legal action against:

Med Provisions This company, based in Montreal, Canada, allegedly called consumers in the United States and claimed it could help them save 30 to 50 percent on prescription drugs. The company claimed to operate an online pharmacy and offered a 30-day money-back "guarantee" on its "membership package," which costs $389. Some consumers were also told they would lose their Medicare benefits if they did not sign up for the package, according to the FTC. Many consumers who ordered the package either receive nothing from the company or a worthless card from an organization that supposedly could provide Canadian drugs to U.S. consumers. According to the FTC, all of the company's claims are false, and many consumers could not get a refund;

Union Consumer Benefits This Montreal-based telemarketing company allegedly sold worthless medical discount packages to elderly consumers throughout the United States, according to the FTC. The company allegedly used deceptive tactics to persuade consumers to reveal their bank account information -- often pretending they were calling from the Social Security Administration, Medicare, or the consumers' bank. In some cases, the company offered "free" benefits or claimed to offer a medical discount plan that would save the consumers' money on medical care and prescriptions -- for a one-time fee. The company then debited $399 from the consumers' bank accounts and sent them a package containing a prescription discount card that does not work. The FTC also alleged the company violated the law by calling consumers whose telephone numbers were listed on the DNC Registry;

Steven Breitling/ICS Financial Firm According to the FTC, this company first sent consumers a direct mailing from ICS Financial that "guaranteed" them a $2,000-$5,000 loan. The company's telemarketers then contacted consumers who returned the application forms and told them they had to first pay a $75 "consulting/collective" fee and sign a contract to get their loan. After paying the fee, many consumers never hear from the company again, the FTC alleged. Those who do hear from the company were referred to another lender. That lender's application stated they were not guaranteed for approval and also required them to pay an additional fee. Many consumers who completed the loan applications and paid the fee received a notice stating their loan was denied;

American Financial Card, Inc. According to the FTC, this company ran an advance-fee telemarketing scheme. The FTC alleged this company defrauded thousands of consumers in the United States by falsely promising to deliver a credit card for an up-front payment of $200. The company claimed the cards carried a $2,000 credit limit, cash advances up to $1,000, and a fixed interest rate. After paying the fee, consumers did not receive the promised card. Instead, most received a card that could only be used to buy items from the company's catalog;

Integrity Financial Enterprises This is another advance-fee scam, according to the FTC. The company allegedly offered consumers a general-purpose credit card with a credit limit between $2,500 and $7,500. Consumers, however, had to pay an up-front fee of $200 to $300. The company told consumers they would receive vouchers equal to the amount of the advance fee and those could be applied to future card balances. Some consumers received nothing from the company, according to the FTC. Others received a card they could only use to buy merchandise from the company's catalog or online store. The company told consumers who complained they would not receive a refund of the advance fee they paid;

Financial Advisors & Associates The FTC alleged this company and its principals -- doing business as Freedom Financial and -- deceptively told consumers they could provide them with a major credit card, like a Visa or MasterCard. Instead, the company gave consumers only limited-use, advance-fee catalog cards. After paying 10 percent of the promised "credit line" up-front, consumers learned the cards could only be used to buy merchandise from the company's catalog or Web site. The company routinely turned down consumers' requests for refunds of the up-front fees they paid, according to the FTC;

Handicapped & Disabled Workshops, Inc. The FTC alleged this company targeted elderly consumers in telemarketing various household products at exorbitant prices. The company aggressively solicited these consumers, often calling several times a day, to convince them to buy, the FTC said. The telemarketers' calls seeking "support" or "donations," made many consumers believe their purchases would help the handicapped or disabled workers employed by the company. The FTC also alleged the company mailed consumers products they did not order and debited consumers' credit and debit cards -- without their authorization -- for products they did not order. The FTC also alleged the company violated the DNC Registry;

Helping Hands of Hope In a similar scam targeting elderly consumers, the FTC alleged this company sold various household products and promised that proceeds from the sales would either help employ the disabled or go to a charitable cause. The FTC said the company harassed consumers who said they did not want to buy these productsand tried to force them to make a purchase. In some instances, the company sent consumers products they did not order. The FTC also said the company ignored the DNC Registry and consumers' request to not be called again;

U.S. Magazine Services According to the FTC, this company allegedly misled consumers about the monthly charges for magazine subscriptions. While the actual price was sometimes disclosed in later calls--after billing information was provided--some consumers only learned what they were charged (or that they were charged at all) after checking their credit card bills or debit card account balances. Consumers who tried to cancel the subscriptions were told no cancellations were allowed;

NHS Systems, Inc. According to the FCT, this company used false and misleading sales tactics to deceive consumers' into providing bank account information. The FTC said the company claimed to be affiliated with U.S. government agencies like the Social Security Administration, IRS, or Medicare. The company often promised grants, tax refunds, tax rebates, or health benefits. Consumers were charged $29.95, $299.95, or both, and later discovered they were enrolled in a "discount health care program" they never authorized;

City West Advantage, Inc. d/b/a Unified Services According to the FTC, this company called consumers and told them they had won a $1,000 shopping spree or other free gifts. The FTC, however, said the company's real objective was to persuade consumers to provide their bank account information. The company's telemarketers told consumers they would be charged $1.95 for shipping and handling for their so-called free gifts. If the consumer was reluctant to provide their banking information, the telemarketers allegedly called back repeatedly and harassed the consumer -- even after they asked them to stop calling. Consumers who provided their banking information learned the company charged them approximately $149. In most instances, the "gift" consumers received was worthless--usually an "Internet shopping spree" certificate that could only be used on one Web site;

Direct Connection Consulting, Inc./Suretouch LLP This company allegedly contacted consumers with promises of free gift cards, gas cards, or free resort vacations. In many cases, the company told consumers they were being called by major retailers and would be rewarded if they took a short survey. They company told other consumers they would receive free products if they listened to a telemarketing pitch and answered "yes" when prompted. The telemarketers often read their pitches so fast that consumers could not understand them or did not realize they had agreed to pay for products or services. Consumers who understood the pitches were told they would not be billed because they had not given the company any billing information. The company, however, had access to consumers' billing information and charged their credit cards or debited their bank accounts. Consumers who were charged did not receive the free goods or the services promised. The Kentucky Attorney General's office joined the FTC as co-plaintiff in this case.

The FTC said this telemarketing crackdown -- which included assistance from law enforcement agencies across the country and in Canada -- will save consumers approximately $30 million over the next year. "The sheer breadth of 'Operation Tele-PHONEY' is a testament to the ability of law enforcement agencies at all levels to work together effectively to help protect consumers both in the United States and abroad," FTC Chairman William E. Kovacic said. "I'd like to personally thank all of our partners in this sweep for helping to eradicate the scourge of telemarketing fraud."

What to do

The FTC said consumers can protect themselves from unscrupulous telemarketing schemes by asking callers the following questions:

• Who is calling and why? Telemarketers must tell you this is a sales call, the name of the seller, and what they are selling before they make their pitch, according to the FTC. If the caller refuses to give you this information, hang up;

• What's their hurry? Fast talkers who use high pressure tactics could be hiding something, the FTC warns. Take your time. Most legitimate businesses will give you time and written information about an offer before asking you to make a purchase;

• If it's free, why are you asking me for money? The FTC says consumers should question any charges they must pay to receive a prize or gift. Free is free. If you have to pay, it's not a prize or a gift;

• Why am I "confirming" my account information or giving it out at all? Some callers have your billing information before they call you, according to the FTC. They're trying to get you to say "okay" so they can claim you approved the charge. Or, they're trying to learn your account number. Don't give out this information unless you know who you are talking to and what you are buying;

• What time is it? The law states telemarketers can only call between 8 a.m. and 9 p.m, according to the FTC. Anyone calling earlier or later that those times is violating the law.

Can't the national DNC Registry prevent these telemarketing calls?

The FTC says putting your number on the Registry will stop most telemarketing calls but not all of them.

Consumers will still receive calls from companies they do business with, unless they specifically tell those companies not to call.

The FTC warns that any calls from unfamiliar businesses could be a sign of a scam.

Consumers can report telemarketing scams and violations of the DNC Registry to the FTC or by calling 1-877-FTC-HELP.