Acting on the FTC's motion, a New York district court recently entered a temporary restraining order against Instant Response Systems, LLC and its principal Jason Abraham for alleged violations of the Telemarketing Sales Rule and the FTC Act. According to the FTC's complaint, the defendants used deception, threats, and intimidation to induce elderly consumers to pay for medical alert systems they had not ordered. Defendants allegedly called elderly consumers to pressure them into buying a medical alert service consisting of a pendant that would provide help during emergencies. When calling consumers, Instant Response supposedly told the consumers that they had already ordered the service and owed the company money. The company also allegedly shipped bogus invoices and unordered medical alert pendants to consumers without their consent, repeatedly threatened consumers with legal action in order to induce and coerce payment, and made unsolicited calls to consumers whose phone numbers were on the national Do Not Call Registry. These purported actions violate the Telemarketing Sales Rule's prohibitions against: (1) making false or misleading statements to induce consumers to pay for goods; (2) threatening or intimidating consumers into paying for goods; (3) and calling consumers on the national Do Not Call Registry, if those individuals do not fall under one of the exceptions to the requirement to scrub against the Registry. According to the FTC, the defendants' actions also violated the FTC Act's prohibitions against unfair or deceptive acts by misrepresenting that consumers had agreed to pay for goods and by sending and billing consumers for unordered merchandise.
TIP: The FTC has the ability to temporarily halt the operations of companies that violate the Telemarketing Sales Rule. Although this case may be viewed by some as a flagrant violations of the Rule and the FTC Act, it nevertheless serves as a reminder to remember the Do Not Call registry, and check against it as required when making telemarketing calls.