Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—EDNY: Robocallers Allegedly Posing as FTC to Get Consumers’ Bank Info Preliminarily Enjoined, (Jan 8, 2013)

By E. Darius Sturmer, J.D.

The federal district court in Brooklyn has granted the FTC’s request for a preliminary injunction halting an operation that allegedly made robocalls falsely claiming an affiliation with the FTC in order to dupe consumers into divulging their bank account information (FTC v. The Cuban Exchange, Inc., January 4, 2013, Garaufis, N.) As neither of the defendants—The Cuban Exchange, Inc, and its principal Suhaylee Rivera—has made any appearance in the case or objected to a December Report and Recommendation that favored granting the request, a temporary restraining order issued in November shortly after the FTC filed the suit was converted to a preliminary injunction solely on the basis of the FTC’s showing that it is likely to prevail on its claims and that its requested injunction is in the public interest.

The FTC claims that the defendants, The Cuban Exchange, Inc, and its principal Suhaylee Rivera, violated the FTC Act and the Telemarketing Act by using fake caller I.D. to make it appear as if the calls were coming from the agency and then, within the calls, directing consumers to the website www.ftcrefund.com. At this site, which the Commission says has since been disabled, the defendants solicited personal and bank account information purportedly to expedite consumer redress payments the consumers were told they were entitled to receive.

The court adopted the analysis of the report and recommendation in its entirety. In that document, U.S. Magistrate Judge Robert M. Levy noted that the FTC had submitted extensive documentation in support of its motion, including the declarations of an FTC investigator and three consumer witnesses. The evidence revealed the detailed inner workings of the alleged scam and clarified that neither of the defendants was in any way connected to the federal agency or to any FTC consumer redress program. In light of the evidence, the report and recommendation stated, the FTC showed a likely of ultimate success on the claims. In addition, the public equities weighed in favor of granting the injunction, given “the fundamentally deceptive nature of the defendants’ scheme.” The public interest predominated and was best served by the issuance of the requested relief, the court clarified.

The case is 12-CV-5890 (NGG) (RML).

Bikram Bandy for the FTC.

Cases: ConsumerProtection NewYorkNews FederalTradeCommissionNews