FTC Pulls the Plug on Two Robocall Scams

Telemarketer with headsetTwo Florida telemarketing schemes that flooded consumers with misleading pre-recorded robocalls making false promises to reduce their credit-card interest rates have been shut down by the Federal Trade Commission.

The agency reached a settlement that permanently bans the two related operations from making robocalls and selling debt relief services. The action marks the latest in a series of enforcement actions the FTC has taken to rein in robocallers, especially those who try to take advantage of consumers battered by the recession.According to the FTC, JPM Accelerated Services and related defendants placed thousands of illegal, pre-recorded robocalls to consumers, identifying themselves only as "card services" and offering lower interest rates on their credit cards. Consumers who pressed "1" after hearing the automated pitch were transferred to live telemarketers, who made empty promises about JPM's ability to dramatically lower their interest rates.

The complaint accused the telemarketers of charging up-front fees ranging from $495 to $995. They also assured consumers that lower interest rates would save them thousands of dollars in a short period of time, allowing them to pay off their debts faster. The defendants also falsely claimed that if consumers didn't save thousands of dollars from lower interest rates, the hefty, up-front fee would be fully refunded.

After pocketing the up-front fee from victims, however, JPM failed to deliver the promised interest rate reductions and savings, and regularly refused to honor its money-back guarantee. The FTC complaint also charged the defendants with violation of the Telemarketing Sales Rule by calling consumers on the Do Not Call Registry, blocking or "spoofing" caller ID and making unlawful robocalls.

The settlement orders imposed penalties of $5.9 million against defendants associated with JPM and $3.2 million against six individual defendants associated with an affiliated operation called IXE Accelerated Financial Centers, LLC. The penalties reflect the amount of money consumers lost to these robocall schemes. However, the judgments have been suspended, based on the defendants' inability to pay, but will become due if the defendants are found to have lied about their financial condition.

Two of the defendants in the IXE operation, Ivan X. Estrella and Jaime Hawley, also are liable for an unpaid $75,000 fine recently entered against them in a case brought by the Florida Attorney General.

The FTC received help in shutting down these robocall rings from other law enforcement agencies in the U.S. and Canada, including: the U.S. Postal Inspection Service; the Attorney General of Florida; the Florida Department of Agriculture and Consumer Affairs; the Canadian Radio-Television and Telecommunications Commission; the Competition Bureau of Canada; the Toronto Police Service Fraud Squad - Mass Marketing Section; the Ontario Provincial Police Anti-Rackets Section; the Ontario Ministry of Consumer Services; the Royal Canadian Mounted Police; and the United Kingdom's Office of Fair Trading. The Better Business Bureau of Central Florida also provided assistance.
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