A Canadian enterprise that allegedly targets elderly consumers, dupes them into revealing their bank account information, then debits hundreds of dollars from their accounts is facing Federal Trade Commission charges that its operation violated federal law.
The FTC has asked the court to bar the defendants’ business practices and award consumer redress.
According to the FTC, Xtel Marketing, Inc., and its principals cold-called consumers across the U.S. and, masquerading as Social Security or Medicare representatives, told consumers that they must provide bank account information or risk losing their Social Security payments.
On Nov. 9, a U.S. District Court in Illinois issued a temporary restraining order barring the activities and freezing the defendants’ assets.
Since at least 2002, Xtel, Navin Baboolal, and Annilla Ramkissoon, doing business as Millenium Consulting and Med Supply, have been making cold calls to elderly consumers and claiming that, due to a Social Security Administration computer failure, the consumers’ personal information had been erased from the system. The defendants tell consumers that they must provide their bank account and routing information to remedy the problem. The FTC’s complaint states that, if consumers are reluctant to provide the information, the defendants often threaten them with delays or complete loss of their Social Security benefit payments, the FTC charged.
The defendants also told consumers they would enroll them in a new Medicare insurance program that will give them discounts on medication purchases and eyeglasses. The defendants allegedly claim that they will debit $299 from consumers’ bank accounts to enroll them in the program, and will send them a Medicare insurance card or drug discount card. Although the defendants debit consumers’ accounts, the consumers receive nothing in return. According to papers filed with the court, consumers lost approximately $1 million in this scam, the FTC further alleged.
The FTC also charges that the defendants have violated the FTC Act by falsely claiming that:
*They are employees of Medicare or the Social Security Administration.
*Consumers must give the defendants their bank account information to replace information lost in a computer failure
*Consumers may lose their Social Security benefits if they do not provide the requested information.
*The defendants will enroll consumers in a Medicare insurance program after debiting $299 from consumers’ accounts.
The FTC has asked the court to bar the defendants’ illegal operation and award redress for consumers who have fallen victim to the scam.
The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division on Nov. 9.
