Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Operator of advance fee recovery telemarketing scheme fined $2.8M, (Oct 26, 2015)

By Greg Hammond, J.D.

The operator of a telemarketing advance fee recovery scheme that bilked $1.3 million from consumers who had already lost money to timeshare resale and investment scams was ordered to pay over $2.8 million. The federal district court in Fort Lauderdale, Florida, also issued a final order, prohibiting the telemarketer from participating in telemarketing or otherwise violating the Telephone Sales Rule (TSR) (FTC v. Consumer Collection Advocates, Corp., File No. 142 3082, Dkt. 0:14-cv-62491-BB).

According to the Commission’s complaint, Consumer Collection Advocates, Corp. called consumers and falsely guaranteed that for an up-front fee—typically 20 percent of the amount lost in timeshare resale or investment scams—Consumer Collection would recover substantial amounts of money for them within 30 to 180 days. Consumers were sent a contract and power of attorney to sign and return with the up-front payment ranging from hundreds to as much as $10,000. Those who did not agree to buy Consumer Collection’s services received repeated calls pressuring them to sign up. Once consumers paid for the recovery service, however, they stopped hearing from Consumer Collection. In addition, consumers who attempted to call to obtain a status on their recovery were told their case was being worked on, but few, if any, consumers received any money, the complaint alleged.

A stipulated preliminary injunction was entered in November 2011 prohibiting Consumer Collection from misrepresenting that consumers who buy their services will recover, or are highly likely to recover, a substantial portion of money that they have lost to telemarketers, typically within 30 to 180 days. In addition, Consumer Collection was barred from violating the TSR and from selling or otherwise benefitting from customers’ personal information.

Summary judgment was granted in favor of the Commission in early September 2015, and the federal district court in Fort Lauderdale, Florida, has now entered its final order of permanent injunction and monetary judgment against Consumer Collection and its owner. According to the final order, Consumer Collection is permanently restrained from participating in telemarketing; misrepresenting or assisting others in misrepresenting any fact material to consumers concerning any good or service; and from attempting to collect or collecting payment for any recovery service, and from selling, assigning, or transferring any right to collect payment for any recovery service. An over $2.8 million judgment was also entered against Consumer Collection. The money recovered by the Commission will be used as equitable relief, including consumer redress.

Companies: Consumer Collection Advocates, Corp.

News: ConsumerProtection FederalTradeCommissionNews