FTC sues to stop robocallers

FTC goes after robocallers who claimed to help out with credit card problems

The Federal Trade Commission today said it was going after three outfits that allegedly made robocalls to sell worthless credit-card interest-rate reduction programs for large up-front fees of as much as $1,495.

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The lawsuits against Economic Relief Technologies; Dynamic Financial Group; and JPM Accelerated Services (JPM) allege the defendants broke the law by making illegal robocalls to consumers and that their deceptive sales pitches violated the FTC Act and the FTC’s Telemarketing Sales Rule. The companies violated a host of regulations, the FTC says, from calling consumers whose phone numbers are on the National Do Not Call Registry; calling consumers who had previously asked not to be called; and failing to transmit their caller ID information, as required.

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The Federal Trade Commission today said it was going after three outfits that allegedly made robocalls to sell worthless credit-card interest-rate reduction programs for large up-front fees of as much as $1,495.

Bots, bombs and weird science: The wackiest stories of 2009

The lawsuits against Economic Relief Technologies; Dynamic Financial Group; and JPM Accelerated Services (JPM) allege the defendants broke the law by making illegal robocalls to consumers and that their deceptive sales pitches violated the FTC Act and the FTC’s Telemarketing Sales Rule. The companies violated a host of regulations, the FTC says, from calling consumers whose phone numbers are on the National Do Not Call Registry; calling consumers who had previously asked not to be called; and failing to transmit their caller ID information, as required.

The court has issued an order temporarily halting the robocalls pending trial.

According to three FTC complaints, all of the companies made illegal pre-recorded robocalls to consumers, using names like “card services,” “credit card services” or “account services,” the FTC stated.

The robocalls claimed the defendants’ services could lower the interest rate on consumers’ credit cards, the FTC stated. In each case, consumers who pressed 1 after hearing the automated call were transferred to live telemarketers who allegedly misrepresented that consumers could dramatically lower the rates on their credit card, the FTC stated. The companies also said consumers would save thousands of dollars in a short period of time by lowering their interest rates and would be able to pay off their debts faster – for an up-front fee ranging from $495 to $1,495. However, after securing the fee, the defendants allegedly did not negotiate lower rates on behalf of consumers and provided few refunds to those who were dissatisfied with the service, the FTC stated.

The FTC said Economic Relief went a step further allegedly operating a related scam: using names like “Auto Protection Center” and “Warranty Services,” they tricked consumers into believing they were affiliated with their vehicle manufacturer or dealership, and falsely stated that the consumers’ vehicles’ warranties were about to expire.

The FTC also noted that this was the second major swipe at robocallers it has taken this year. In May took action against some robocallers by asking a federal court to shut down two companies that have been bombarding consumers with hundreds of millions of allegedly deceptive robocalls in an effort to sell vehicle service contracts.

According to the FTC, the robocalls have prompted tens of thousands of complaints from consumers who are either on the Do Not Call Registry or asked not to be called. Five telephone numbers associated with the defendants have generated a total of 30,000 Do Not Call complaints. Consumers received the robocalls at home, work, and on their cell phones, sometimes several times in one day. Businesses, government offices and even 911 dispatchers also have been subjected to the calls, the FTC said.