The Federal Trade Commission has distributed 5,790 checks totaling $4,255,209 to consumers who were deceived by a defendant’s bogus “extended auto warranties,” the agency announced.
According to the Commission, The Dolce Group Worldwide and owner Fereidoun “Fred” Khalilian (doing business as My Car Solutions) used illegal robocalls to mislead consumers into believing that the defendants were affiliated with automobile dealers and manufacturers in order to sell extended vehicle warranties.
Consumers were “bombarded” with robocalls warning that their car’s warranty was about to expire, urging them to “press one” to speak with a representative. If consumers did so, they were transferred to the defendant’s telemarketers, who identified themselves as from the “service contract department” and needed to “verify” information about their cars. Calls were then transferred to a “senior specialist,” who made claims such as “I’m from Honda,” or “I’m from your authorized Honda dealer.”
None of the purchasers ever received an actual warranty extension despite paying between $1,300 and $2,485, the FTC said, and consumers had a “nearly impossible” time trying to get their money back from the defendants.
A Florida federal court judge entered the $4.2 million judgment in 2011, further banning the defendants from telemarketing or helping others to telemarket and prohibiting them from making any misrepresentations or omissions when selling any goods or services.
After years of efforts, the FTC recovered the entire judgment from the defendants and mailed full refund checks to affected consumers.
To read the complaint and order in FTC v. Khalilian, click here.
Why it matters: Khalilian was already well known to the agency from a deceptive travel advertising case in 2001 that required him to pay $185,000 in consumer redress and banned him from travel-related telemarketing. Despite obtaining a judgment against the defendants in 2011, it took the FTC another five years to obtain the full $4.2 million in order to provide refunds to affected consumers.