Car Warranty Robocaller Shut Down by FTC

robocallSerial robocaller Fereidoun "Fred" Khalilian has been banned from telemarketing for life and fined more than $4 million to settle Federal Telecommunications Commission charges he used robocalls to sell consumers bogus auto service contracts.

Khalilian and his company, The Dolce Group Worldwide, LLC, are the latest robocall scam to have its plug pulled under the FTC's ongoing crackdown on deceptive prerecorded telemarketing calls.

The robocall scheme, which did business under the name My Car Solutions, bilked consumers into paying thousands of dollars and led them to believe the company was affiliated with auto dealers and manufacturers and authorized to sell extended auto warranties.Khalilian is a former Paris Hilton business partner, and his Miami-based business received a failing grade from the Better Business Bureau.

Khalilian is also no stranger to the FTC, thanks to a 2001 settlement that banned him from all travel-related telemarketing and forced him to compensate consumers $185,000 for promoting deceptive holiday plans. In June 2010 the FTC filed a new complaint against Khalilian, alleging that since 2009, he and his company marketed "extended" auto warranties by carpet-bombing consumers with pre-recorded robocalls.

These robocalls warned people their car warranties were about to expire and advised them to speak with a representative. Consumers were then transferred to telemarketers who said they were from the "service contract department," and they would "verify" information about the consumers' cars and "confirm" other information, including their zip code.

The telemarketers then transferred consumers to a "senior specialist" who also made false statements to elicit information from the unsuspecting victims. Only after consumers bought the supposed warranties did they discover that:
  • My Car Solutions wasn't affiliated with their car manufacturer.
  • The contract didn't cover "the entire engine."
  • The contract didn't provide "bumper-to-bumper" coverage.
  • The contract excluded certain "pre-existing conditions."
Consumers who tried to get their money back -- typically between $1,300 and $2,485 per warranty -- found it nearly impossible to obtain a refund.

The court order settling the FTC's charges bans Khalilian and The Dolce Group from telemarketing or helping others to telemarket, and prohibits them from making any misrepresentations or omissions when selling any goods or services.

The order includes a penalty of more than $4.2 million, the amount Khalilian and The Dolce Group fleeced from consumers.

Under the order, Khalilian will satisfy part of the judgment by turning over corporate and personal property totaling approximately $50,000. The FTC is authorized to take action to collect the remainder of the outstanding judgment from the defendants. The settlement order also contains provisions to ensure the defendants comply with its terms.

Khalilian, a neon-green Lamborghini-driving nightclub owner, has had more unsavory brushes with the law as well, including three arrests for sexual misconduct or rape, the Orlando Sentinel reported in 2007. According to the Sentinel, the Iranian-born Khalilian also claimed diplomatic immunity.

"I'm a diplomat. You can't arrest me. I own Club Paris," a police report quoted Khalilian as telling Sgt. Rhonda Huckelbery, who was investigating a report by a passer-by that Khalilian tried to rape a woman outside the nightclub on Nov. 18, 2005. "You work for me."

The "Club Paris" in question was a Khalilian-owned nightclub that promised regular appearances by jet-setting party girl Paris Hilton, who he reportedly paid seven-figures to show up twice a month. But the club closed after three years and only sporadic appearances by Hilton.
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