Telemarketers forced to surrender $5M in profits

Canadian telemarketers who fraudulently pitched Visa and MasterCard credit cards have been ordered to pay back the nearly $5 million they garnered via the scheme.

The Federal Trade Commission brought the charges and the U.S. District Court for the Northern District of Illinois said under the terms of the final order and judgment, the defendants – collectively known as Pacific Liberty – are barred from violating the FTC Act and the Commission’s Telemarketing Sales Rule (TSR).

They are liable as well for approximately five million dollars, the total net sales they made through the cross-border scheme.

The FTC’s complaint charged the defendants with using outbound telemarketing to call U.S. consumers. For an advance fee of $319, which they electronically debited from the consumers’ bank accounts, the defendants promised that they could deliver Visa or MasterCard credit cards, along with free gifts such as cell phones. No consumers who paid the money received either credit cards or “complimentary” gifts, the FTC said.

Instead, consumers received only a “member benefits” package with items such as booklets on how to improve their creditworthiness. Some also received a “member merchandise” card valid only for purchases from a catalog supplied by the defendants. The defendants also called consumers offering them a brand-name personal computer if they agreed to have a fee debited from their bank account. No one received the promised computers. Instead, they received certificates purportedly redeemable for off-brand computers, but the consumers first had to pay additional fees. The FTC is not aware of any consumer who ultimately obtained a computer, the FTC said.

In September 2007, the Competition Bureau Canada announced that two of the Pacific Liberty defendants,  Oleg Alex Oks and Aleksandr Oks had pleaded guilty to criminal charges of deceptive telemarketing. Oleg Oks was sentenced to a year in jail and two years probation. Aleksandr Oks received a six-month conditional sentence and 12 months probation. Both were barred from telemarketing for 10 years.

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