The Federal Trade Commission has filed 13 legal actions in what it calls the largest telemarketing fraud sweep in its history.
The defendants defrauded more than 500,000 consumers of over $100 million, the FTC said.
Known by the name Operation Tele-PHONEY, the roundup also involved actions by 30 other agencies, including states and foreign entities such as Canada’s Competition Bureau and the British Columbia Business Practices and Consumer Protection Authority.
There were a total of 180 actions, including civil and criminal charges, the FTC reported.
“The sheer breadth of Operation Tele-PHOHENY is a testament to the ability of law enforcement agencies at all levels to work together effectively to help consumers both in the United States and abroad,” said FTC Chairman William E. Kovacic in a statement.
The FTC also announced a consumer education campaign titled, “Who’s Calling?” It encourages consumers to report fraud and to register for the FTC’s Do-Not-Call Registry.
These are the civil cases filed by the FTC:
Med Provisions—This Montreal-based company promises U.S. consumers that it can save them 3o% to 50% on their prescription drug costs, according to the FTC. Victims are charged $389 for a membership package, but they receive a “worthless card”—or nothing, the FTC contends. The case is on file with the U.S. District Court for the Northern District of Ohio.
Union Consumer Benefits—This Montreal outfit markets useless medical packages to elderly U.S. consumers, and the callers often claim they are from the Social Security Administration, according to the FTC. The company has debited $399 from victims’ bank accounts, the commission continues. The case is on file with the U.S. District for the Northern District of Illinois.
Steven Breitling/ICS Financial Firm—These defendants send direct mailings, promising consumers a guaranteed loan of up to $5,000, the FTC alleges. Telemarketers then contact those who respond, informing them that they must pay a $75 fee and sign a contract, the FTC adds. The complaint is on file with the U.S. District Court for the Western District of Oklahoma.
American Financial Card Inc.—This company promises to send a credit card with a $2,000 limit for an advance payment of $200, the FTC claims. But most victims receive a card that can be used only to buy items from the company’s catalog, the FTC adds. The case is on file with the U.S. District Court for the Middle District of Florida, Tampa division.
Integrity Financial Enterprises—Like the previous case, this one involves advance fees for credit cards. The defendant offers cards with a limit of up to $7,500 for fees of up to $300, the FTC states. Those who receives cards can use them only to buy from the company’s catalog or online store, the complaint continues. The case is on file with the U.S. District Court for the Middle District of Florida.
Financial Advisors & Associates—This company offers major credit cards to consumers but sends them “limited-use, advance-fee” catalog cards, according to the FTC complaint. Victims are charged 10% of the promised credit line upfront, the FTC adds. The action is on file with the U.S. District Court for the Middle District of Florida, Tampa division.
Handicapped & Disabled Workshops Inc.—The defendants in this case telemarket elderly consumers to sell them household products at high prices, calling them several times a day. Victims are told that their purchases will help handicapped or disabled people working for the firm. In addition, the company calls people listed on the FTC’s Do-Not-Call Registry. The case is on file with the U.S. District Court for the District of Arizona.
Helping Hands of Hope—This alleged scheme is similar to the previous one. The company harasses consumers until they purchase household products, in some cases sending items that were never ordered, the FTC maintains. The case is on file with the U.S. District Court for the District of Arizona.
U.S. Magazine Services—This magazine subscription seller allegedly misleads consumers about monthly sub charges and in some cases debits their credit or debit cards without notifying them, the FTC alleges. The case is on file with the U.S. District Court for the District of Montana, Missoula division.
Publishers Business Services—This firm calls consumers for a purported survey, then offers them “free” or low-cost magazine subscriptions, according to the FTC. Later, the victims are charged several hundred dollars for the subs, and are subjected to strong-arm collection tactics, including harassment at work, the FTC argues. The case is on file with the U.S. District Court for the District of Nevada.
NHS Systems Inc.--These defendants call consumers, claiming that they are with government agencies like the Social Security Administration, the IRS or Medicare, the complaint alleges. They offer tax refunds and rebates and health benefits, but the purpose is to garner bank account information from the victims, the FTC continues. Consumers are enrolled without permission in a “discount health program” for charges of up to $299.95, the commission adds. The complaint is on file with the U.S. District Court for the Eastern District of Pennsylvania.
City West Advantage, Inc. dba Unified Services—In this case, the firm tells consumers they have won a $1,000 shopping spree or another prize, but the purpose is to get bank account information, the FTC charges. Victims are charged around $149 and get little in return, the commission adds. The case is on file with the U.S. District Court for the District of Nevada.
Direct Connection Consulting Inc./Suretouch LLP—The defendants offer free gift cards, gas cards and vacations but provide nothing, according to a complaint filed by the FTC and the Kentucky Attorney General’s office. But they charge the victims’ credit cards or bank accounts, using information they already have, the papers continue. The case is on file with the U.S. District Court for the Northern District of Georgia, Atlanta division.
