The Federal Trade Commission has stopped the operations of Suntasia Marketing Inc., an allegedly huge fraudulent Largo, FL-based telemarketing operation.
A federal court in Tampa, FL has entered a temporary restraining order halting the operation, freezing the assets of all defendants and naming a temporary receiver over the alleged corporate participants.
The FTC alleged that over the last several years, Suntasia used at least 15 different business names to defraud consumers across the U.S. out of hundreds of millions of dollars.
According to the FTC, when Suntasia’s telemarketers called consumers to offer supposedly “free” trial memberships in discount buyers and travel clubs, the company allegedly deceived consumers into divulging their bank account information and later charged them for a series of negative option programs without authorization.
Charged in the complaint were: FTN Promotions Inc., doing business as Suntasia Inc., Suntasia Marketing, Inc., and Capital Vacations; Guardian Marketing Services Corp., doing business as Guardian Escrow Service; Strategia Marketing LLC; Co-Compliance LLC; JPW Consultants, Inc., doing business as Freedom Gold, Variety!, Credit Life, and Freedom Ring ULD; Travel Agents Direct, LLC, doing business as Travel Agents Go Direct, Florida Direct, and Lucid Long Distance; Agent’s Travel Network, Inc., doing business as Florida Passport; Bay Pines Travel, Inc.; Suntasia Properties, Inc.; Byron W. Wolf; Roy A. Eliasson; Alfred H. Wolf; Donald L. Booth; Jeffrey P. Wolf and John Louis Smith II.
Calls to Suntasia’s offices Wednesday were greeted with a recorded message saying it was “temporarily closed, call back at a later time.”
According to the complaint, telemarketers typically began their sales pitch by indicating that they were calling in regard to the “banking account” of their “valued customers,” to make consumers believe that Suntasia was affiliated with their banks. The telemarketers allegedly explained that the consumers had been chosen to receive a series of “free gifts,” typically a combination of either “$100 in gas coupons,” “$400 in airlines savings vouchers,” or “two free nights of hotel accommodations.”
Consumers were told that they could keep these gifts even if they ultimately canceled Suntasia’s negative option program. These gifts turned out to be laden with undisclosed conditions and restrictions that rendered them effectively worthless. In addition, the defendants honored the “gift” vouchers only if consumers maintained enrollment in their programs, despite the telemarketers’ promises, according to the FTC.
After offering the “free gifts,” Suntasia telemarketers quickly attempted to obtain consumers’ account numbers. They indicated that they needed to “verify” this information to confirm consumers’ eligibility to receive the gifts. Having already pretended to be affiliated with consumers’ banks, the telemarketers now purported to already possess consumers’ bank account numbers. They read consumers their publicly available bank routing numbers, and then asked consumers to “verify” the remainder of the account number from the bottom of a check.
According to the FTC, many consumers disclosed their account numbers because they believed they were simply verifying information that the telemarketers already had. The FTC also alleges that consumers frequently thought their account number was being “verified” solely to confirm their eligibility to receive the free gifts, not to authorize any future charges to their accounts, the complaint continued.
After consumers divulged their bank account number, the telemarketers quickly began recording a “verification,” asking consumers to repeat the account number they had just “provided.” At the end of the recording, Suntasia telemarketers quickly offered consumers two additional negative option programs, commonly referred to as “upsells.” The FTC alleges, however, that these “upsell” offers were presented in such a way that consumers did not realize they were being asked to authorize the purchase of additional products and services, according to the FTC.
If Suntasia telemarketers did discuss the length of the free trial period, they allegedly said this period would begin only once consumers received program materials in the mail. The FTC charged that Suntasia actually started consumers’ free trial periods on the date of the sales call, however, meaning that consumers often had little, if any, time to cancel Suntasia’s programs without being charged.
In addition, some consumers did not receive any program mailings from Suntasia and thus had no opportunity to cancel before they were charged. In many instances, these consumers received their first notice of the trial memberships when the defendants began charging them. In other instances, consumers received the program mailings only a day or two before their accounts were to be charged. Suntasia did not provide any consumers with the free trial period that was promised in their telemarketing calls, according to the complaint.
The package consumers received in the mail also disclosed, for the first time, the telephone number that consumers must call to cancel. Prior to receiving this package, consumers had no way to contact Suntasia to cancel or to ask questions. The FTC alleges that in some instances, Suntasia proceeded to charge the accounts of even those consumers who canceled its programs. In addition, if consumers successfully canceled one program, they were not told that they still may be charged for two other programs or that they must call different telephone numbers to cancel each of those programs, according to the FTC.
The FTC alleged that the defendants misrepresented their affiliation with consumers’ banks or other third parties, that they already had consumers’ account numbers, the starting point and length of the free trial period, that they would honor consumers’ cancellation requests, that consumers may easily cancel their participation in a program and that consumers are entitled to keep and to use the promised free gifts even if they ultimately cancel the negative option program.
The defendants also failed to disclose, or to disclose adequately, that the consumer’s account would be charged unless the consumer takes affirmative action to avoid the charge, that consumer’s checking account information would be used to debit their bank accounts, the cost of the programs, the dates the consumers’ account would be charged, the dates that the trial period began and ended, the specific steps consumers must take in order to cancel, including that consumers must cancel each of the programs by calling a separate telephone number, and the conditions and restrictions on the “free gift” vouchers that severely limit their value and usefulness, according to the FTC.
The FTC also alleged that the defendants debited funds from consumers’ accounts without their express verifiable authorization and express informed consent, and that they did not clearly and conspicuously disclose the purpose of their call as required by the Telemarketing Sales Rule. The defendants also allegedly illegally purchased leads containing consumers’ unencrypted bank account numbers for use in telemarketing
The FTC received help from Largo Police Dept, the Better Business Bureau of West Florida Inc. and the Pinellas County Department of Justice and Consumer Services
The case is on file at U.S. District Court for the Middle District of Florida in Tampa.
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