Feds Disconnect Robocall Ring that Took Millions
The case is part of the FTC's continuing crackdown against fraudsters taking advantage of financially-troubled consumers, which in the past year has included action against marketers of worthless credit card interest rate reduction services.According to the FTC, since at least 2007, the defendants used at least 10 different company names, including AFL Financial Services, when making bogus promises it would refund consumers if they didn't save at least $2,500.
When consumers called to complain, the FTC charged, the robocallers simply disappeared. The FTC complaint also accused the company of defrauding nearly 13,000 consumers out of almost $13 million.
The defendants, who are based in Toronto, Canada, and the Rochester, N.Y., area, operated two telemarketing "boiler rooms" in Orlando, Fla. Using illegal robocalls to contact consumers, the defendants claimed that for $995, they could substantially reduce credit card interest rates and help consumers get out of debt three to five times faster than normal.
The false claims included suggestions that savings from lower interest rates would pay for the service. In reality, the FTC says, the defendants failed to lower consumers' interest rates, consumers failed to realize the promised $2,500 in savings and failed to receive refunds.
The FTC complaint charges that the misrepresentations violated the FTC's Telemarketing Sales Rule and the FTC Act. It also accuses the defendants of calling consumers whose numbers are on the National Do Not Call Registry and making illegal robocalls.
The lawsuit was filed under seal in the U.S. District Court for the Northern District of Illinois, Eastern Division, against Direct Financial Management Inc.; 2194673 Ontario Inc., doing business as (d/b/a) The Elite Financial Group; F&F Payment Processing Inc.; Bajada Management Group Inc.; David D. Richards; Baird B. Fisher; Jacqueline M. Fisher; and Joseph B. Foley.
Last week, Chicago Federal District Court Judge Joan H. Lefkow entered a temporary restraining order with an asset freeze, halting the defendants' operations pending trial and appointing a receiver over the two United States corporate defendants. In filing its complaint, the FTC is seeking to permanently halt the defendants' allegedly illegal conduct and return their ill-gotten gains to defrauded consumers.
The FTC brought this case in cooperation with the Ministry of the Attorney General of Ontario, Civil Remedies for Illicit Activities Office. The Ministry simultaneously filed a separate lawsuit in Ontario seeking assets for consumer redress to victims in the United States and Canada. The FTC also worked with the Florida Department of Agriculture and Consumer Services, and the Toronto Strategic Partnership in bringing this case.
The Toronto Strategic Partnership members include the Competition Bureau 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 Bank of America and the Better Business Bureau also assisted the FTC in pursuing this case.