Nearshore Americas

FTC Cracks Down on Phony Telemarketers, Fines Total over $2 million

The Federal Trade Commission continues to take an aggressive stand against fraudulent telemarketing firms through its  “Operation Tele-PHONEY” campaign begun last year.
Two telemarketing operations targeted by the Federal Trade Commission as part of a major law enforcement sweep last year must stop the deceptive tactics they allegedly used to trick consumers into buying overpriced magazine subscriptions and worthless medical discount plans – and must pay a $2.06 million fine.
“Operation Tele-PHONEY” is the largest telemarketing fraud sweep ever coordinated by FTC. The FTC has so far successfully solved 11 of the 13 “Tele-PHONEY” cases so far, claims the FTC web site. According to FTC, the magazine-seller telemarketers did not disclose the actual monthly charge and by the time they actually disclosed the charges, the customer had either paid the amount specified or his/her card had already been charged. FTC also noted that these telemarketers did not allow cancellations.
As of now, FTC has obtained a settlement order that prevents the defendants from making any further misrepresentations or withholding important information during the call.
FTC’s second case was against Union Consumer Benefits and its owner, Naeem Alvi, who, according to the FTC, persuaded elderly customers into buying worthless medical discount packages. According to FTC, fraudsters also pretended that they were calling from Social Security Administration, Medicare, or the consumers’ banks and persuaded the customers to disclose their bank account information.
The new court order bars this company from violating the FTC’s Telemarketing Sales Rule and making false representations about the nature of the products or its benefits and costs.

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Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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