A federal judge has fined an allegedly fraudulent Canadian telemarketing operation more than $7.8 million and banned it from telemarketing, according to the Federal Trade Commission.
Named as defendants were: Select Personnel Management Inc., based in Ontario, doing business as Select Management Solutions Canada; 1402473 Ontario Ltd.; 1489841 Ontario Ltd.; 2105635 Ontario Ltd.; Special T Services Group Inc.; United Registration Services Inc. and individual defendants James Stewart, Luigi Paulozza, and Philip J. Richards.
According to the FTC, the defendants targeted U.S. consumers with false claims that it could reduce their credit card interest rates.
U.S. District Court judge Charles R. Norgle, Sr., of the Northern District of Illinois entered a permanent injunction that also bars the defendants from misrepresenting that they are affiliated with consumers’ credit card companies, or that they can get consumers’ credit card interest rates reduced, according to the Commission.
The operation defrauded about 12,000 consumers out of more than $7.8 million between 2005 and 2007 by falsely claiming that it could substantially reduce consumers’ existing credit card interest rates and save them thousands of dollars in interest and finance charges, according to the FTC.
The defendants stated or implied--falsely--that they were affiliated with consumers’ credit card companies. For $675 plus $20 for shipping and handling, the complaint alleges, the defendants sent consumers promotional materials with promises to substantially reduce their interest rates, and a “financial profile form” for them to complete and mail back, according to the FTC.
The complaint alleged that the defendants promised to reduce the interest charged on credit cards to rates between 4.75% and 9%, save consumers at least $2,500, and refund the cost of their services to consumers who did not save at least that much money, according to the FTC.
Instead, the defendants did little more than add their own fee to consumers’ credit card balances. The extent of the defendants’ rate-reduction services consisted of setting up three-way telephone calls with consumers and their credit card companies, and asking that the companies lower the interest rates. Those requests typically were denied, continued the FTC.
The Commission charged that the defendants’ misrepresentations violated the FTC Act and the Telemarketing Sales Rule (TSR). The agency also charged the defendants with violating the TSR by “spoofing” telephone numbers so that their calls appeared on consumers’ caller identification services as coming from another number, and by failing to provide the names of the defendants or their telemarketer on caller identification services.
