Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Alleged robocallers agree to settle FTC charges, (Sep 16, 2013)

By Jeffrey May, J.D.

The FTC announced on September 13 that two groups of companies have agreed to settle charges that they used prerecorded calls to trick consumers into deceptive credit card interest rate reduction scams. The initial cases were filed in 2012 as part of a joint-agency crackdown on companies and individuals allegedly behind millions of illegal robocalls pitching credit card rate-reduction services from “Rachel” and “Cardholder Services” (FTC v. WV Universal Management, LLC, Case No. 6:12-CV-1618-ORL-22KRS, FTC File Nos. 122 3190 and X130007; FTC v. Ambrosia Web Design LLC, Case No. CV-12-2248-PHX-FJM, FTC File Nos. 122 3174 and X130003).

Under both settlements, the defendants are banned from telemarketing and delivering robocalls. In addition, with respect to the defendants behind the Treasure Your Success operation, including WV Universal Management, the proposed consent decree would hold them liable for $2,032,626, based on the amount of consumer injury in the case. However, due to the inability of the individual defendants to pay redress, the monetary judgment has been suspended.

The settlement with the Ambrosia Web Design defendants, in addition to banning telemarketing and delivering robocalls, prohibits: the use of certain payment processing methods, such as remotely created checks, that are often used to conduct fraud; misrepresentations regarding any “financial products or services”; and misrepresentations regarding the efficacy of a product or service. The settlement also requires the defendants to liquidate virtually all of their assets. It includes a judgment of $8.3 million, which will be suspended if defendants comply with the terms of the settlement.

Treasure Your Success. The FTC alleged in an amended complaint against the Treasure Your Success (TYS) defendants, filed in June 2013 in the federal district court in Orlando, that the defendants, including a payment processor, telemarketed a credit card interest rate reduction scheme through prerecorded voice messages. The messages would claim that TYS could substantially reduce consumers’ credit card interest rates in exchange for an upfront fee. Fees would generally be charged to consumers’ credit cards during the telephone call or immediately afterward without consent, according to the agency. TYS defendants also were charged with placing phone calls to consumers on the Do Not Call Registry and to consumers that had asked not to be called again.

Ambrosia Web Design. According to the FTC’s complaint, the Ambrosia Web Design defendants delivered prerecorded calls that urged consumers they called to “press one” if they were interested in credit card interest rate reduction services. Consumers who pressed one were connected to a telemarketer who promised to get them very low interest rates or, in some cases, specific amounts of interest savings. The defendants often deceived consumers into thinking defendants were affiliated with a government program. If consumers agreed to sign up, the telemarketer got their credit card information, often charging an advance fee before providing any service, the FTC alleged.

The FTC alleged that defendants then typically failed to deliver on their promises. In addition, the FTC charged defendants with failing to disclose their purported no-refund/no cancellation policy and billing some consumers without their express authorization. Finally, the FTC alleged defendants illegally called many phone numbers on the National Do Not Call Registry. In June 2013, the FTC amended its original complaint to add charges of credit card laundering in violation of the agency’s Telemarketing Sales Rule.

Companies: WV Universal Management, LLC; Ambrosia Web Design LLC

News: ConsumerProtection FederalTradeCommissionNews