A telemarketing scheme promising money-making opportunities and grants was shut down by the Federal Trade Commission after the agency filed suit in Arizona federal court.
Three individuals and five related companies operated two different scams using telemarketers, the agency said, often targeting veterans, older Americans, or people in debt. In the first scam, the telemarketer—claiming to be a representative from Amazon—offered (for the price of hundreds or thousands of dollars) to create a website for the consumer linked to Amazon.com that would earn thousands of dollars in commissions each month.
The second scheme involved calls claiming to be on behalf of the government, offering grants to help pay for medical costs, debt reduction, or home repairs, the FTC alleged. Under the guise of determining the size of the grant, the telemarketers would ask consumers about their income, home value, credit card debt, access to savings and retirement funds, and other sensitive information. The defendants instructed the consumer to pay thousands of dollars up front, with a guarantee that tens of thousands of dollars in grant money would be coming within 90 days.
Consumers received no money from either scam, the FTC said, and in many instances, the defendants used a tactic known as “reloading,” in which they offered to sell consumers additional phony grants in an attempt to extract even larger payments.
After the agency filed a complaint charging the defendants with violations of the Federal Trade Commission Act and the Telemarketing Sales Rule, a federal court judge in Arizona granted the FTC’s motion for a temporary restraining order halting the defendants’ operations.
To read the complaint and the orders in FTC v. Blue Saguaro Marketing, LLC, click here.
Why it matters: The defendants engaged in multiple violations of both the FTC Act and the TSR by operating two telemarketing scams over the last few years, with the Amazon website scheme running since 2014 and the phony grant scheme since 2015.