An allegedly fraudulent financial services telemarketer has agreed to settle claims with the Pennsylvania state attorney general that it deceptively and unlawfully tried to get senior citizens to liquidate their estates so they could sell them financial products.
The Patriot Group Inc., Mesa, AZ, and its division the Information Center for Retired Citizens Inc. (ICRC), Tempe, AZ, resolved violations of the state's consumer protection law and the Federal Trade Commission’s cooling-off rule, according to Attorney General Mike Fisher’s office.
The Patriot Group and ICRC, without admitting wrongdoing, are required to:
* Provide restitution to consumers who apply for refunds before May 30.
*Pay $6,000 in civil penalties.
*Ensure that all sales promotional materials, contracts and oral representations are in compliance with the state's Consumer Protection Law and Federal Trade Commission Cooling-Off Rule.
*Pay $4,000 for the state's investigation costs.
*Refrain from practicing law without a license.
The Patriot Group, through ICRC, called consumers at their homes to offer them a "free" estate planning consultation, Fisher alleged. The callers set up in-home appointments for consumers to meet with a "consultant."
In at least one case, a caller erroneously claimed to be contacting a consumer on behalf of the Pennsylvania Department of Aging, Fisher continued. In other cases, the callers told consumers that there were changes in Pennsylvania law regarding estate administration, taxes and probate, he added. ICRC is also accused of falsely representing that:
* Beginning Jan. 1, 2001 any estate valued over $25,000 will be taxed at 10%.
* A judge would now determine the proceeds of a consumer's estate regardless of what the consumer's will states.
* Pennsylvania had the authority to tie up a consumer's estate for two years.
*One consumer's particular will was no longer valid.
"We believe that this erroneous information was a scare tactic used to boost in-home consultations and ultimately increase sales for the company," said Fisher in a statement. "This form of deception is clearly illegal and unfortunately resulted in some consumers paying nearly $1,900 for an estate planning package that may not have been appropriate for them."
