Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC, Florida AG charge marketer with using deceptive robocalls to pitch “free” medical alert systems, (Jul 6, 2015)

By Linda O’Brien, J.D., LL.M.

The FTC has filed a joint complaint with the Florida Attorney General’s Office, charging New York-based Lifewatch with using blatantly illegal and deceptive robocalls to trick elderly consumers throughout the United States and Canada into signing up for medical alert systems, the agency announced today. The complaint charges Lifewatch with violating the FTC Act and the FTC’s Telemarketing Sales Rule, as well as Florida’s Unfair and Deceptive Trade Practices Act (FTC v. Lifewatch Inc., File No. 142-3123).

According to the joint complaint, Lifewatch has been bombarding consumers – primarily elderly consumers – with millions of unsolicited robocalls, either directly or through third party telemarketers, since 2012. The calls were often placed to consumers whose numbers were on the National Do Not Call Registry, and typically used fake caller ID information. They also used pre-recorded messages, including one supposedly from “John from the shipping department of Emergency Medical Alert,” to falsely tell the consumers that a medical alert system had been purchased for them, and they could receive it “at no cost whatsoever.”

Consumers who pressed a number to speak with a live operator were told that even though the system costs over $400, they would get it for free. However, the telemarketers refused to answer questions about who bought the system for them, and tell consumers the offer was only good for one day. Telemarketers often used the well-known phrase, “I’ve fallen and I can’t get up” or told consumers they may have seen the product on television, to add an air of legitimacy to the sales pitch.

Eventually, consumers were told they would be responsible for monthly monitoring fees ranging from $29.95 to $39.95 and that they had to provide their credit card or bank account information. They often also were told that they would not be billed until they received and “activated” the system, although they actually were charged almost immediately. Those who later realized they had been tricked discovered that it was very difficult to cancel, and were told they had to pay to return the system or pay a $400 penalty. Many of the consumers called had fixed or limited incomes or relied on family members or health professionals to make financial decisions on their behalf, the complaint stated.

In November 2014, one of Lifewatch’s telemarketing firms, Worldwide Info Services, agreed to stop making robocalls or engaging in other deceptive conduct to settle charges brought by the FTC and State of Florida. In the action announced today, the FTC and Attorney General alleged that Lifewatch knew of, and was responsible for, the illegal activities in that case and that Lifewatch simply continued its telemarketing campaign using a variety of other telemarketers after Worldwide was shut down.

“Some scammers won’t take a hint,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “When we sued Lifewatch’s telemarketers for making deceptive robocalls, they just continued the same illegal practices with new telemarketers. The FTC and the Florida Attorney General won’t be deterred, and will continue to work together to stop illegal robocalls.”

“This company violated the Do Not Call Registry to deceive seniors, not only in Florida but across the country, and we will continue to work with the FTC to do everything in our power to make sure the individuals responsible for this scheme pay,” said Florida Attorney General Pam Bondi.

The complaint was filed in the U.S. District Court for the Northern District of Illinois in Chicago. The agencies are seeking a preliminary injunction to stop the defendants’ use of illegal robocalls and deceptive telemarketing claims, as well as funds for restitution to victims.

Companies: Lifewatch Inc.

News: Advertising ConsumerProtection FederalTradeCommissionNews FloridaNews