FTC Charges Canadian Firm in Telemarketing Scam

The Federal Trade Commission has charged a group of Canadian telemarketers with operating a bogus “consumer protection service” that promises to protect consumers against telemarketing and unauthorized bank activity.

According to the FTC, the defendants prey on elderly consumers’ financial insecurities by telemarketing a service promising to stop unwanted telemarketing calls and block unauthorized charges to consumers’ bank accounts. The defendants, said the FTC, often pose as government or bank officials and dupe unsuspecting consumers into disclosing their bank account numbers, which they subsequently allegedly use to steal hundreds of dollars from each victim. On July 19, at the FTC’s request, a U.S. district court judge entered a temporary restraining order barring the defendants’ illegal activities and freezing their assets.

The FTC’s complaint against Montreal-based International Protection Center states that since at least February 2003, the defendants have telemarketed various services. The defendants allegedly target elderly and infirm consumers, often claiming to represent banks or U.S. government agencies, including the FTC. They claim that, for a fee of $399, they can register the consumer with the National Do Not Call Registry, send consumers a call-blocking device to attach to their telephone, and shield consumers’ bank accounts from fraudulent withdrawals. The FTC alleges that the defendants’ “products,” when they arrive at all, are poorly-produced brochures and a cheap device that simply plays a recorded message asking the caller not to call again.

The FTC’s complaint states that the defendants also misrepresent the cost of their products, sometimes telling consumers they will be free, then automatically deducting $399 from consumers’ bank accounts. In other instances, they allegedly promise consumers a $500 credit to offset the $399 charge, or claim they will deduct the $399 in small installments. The FTC alleges that the defendants never get written authorization from their victims.

The FTC’s complaint charges the defendants, 4086465 Canada, Inc. (d/b/a International Protection Center and Consumers Protection Center); Alain Chikhani a/k/a Allain Chikani; and Rafik Chikani with violating the FTC Act, the FTC’s Telemarketing Sales Rule, and the Gramm-Leach-Bliley Act, for deceptive telemarketing, deducting payments without consumers’ express permission, misrepresenting an affiliation with a bank or government agency, and obtaining consumers’ financial data under false pretenses, respectively.