A telemarketing operation that allegedly made more than $9 million targeting elderly consumers by urging them to buy or invest in e-commerce was hit with a temporary restraining order in an action brought by the Federal Trade Commission.
According to the FTC, the defendants (a trio of individuals and six related corporations) cold-called consumers and pushed them to invest in e-commerce websites or sites that link to popular e-commerce websites (such as Amazon) by promising the deals were "risk free" and had a "100 percent money back guarantee," with huge returns. Elderly consumers less familiar with e-commerce were frequent targets of the calls, as well as veterans and those on fixed incomes, the agency said.
Consumers paid amounts ranging from a few hundred dollars to more than $20,000. After they paid, defendants would respond to consumer calls for about 90 days—the date at which most credit cards limit consumers from disputing charges—and tell them that their "account" was earning substantial money that would be paid out at the end of the quarter, effectively stalling them, the FTC alleged. After that point, the defendants ceased contact with consumers and did not provide the promised investment returns.
The agency's complaint alleged violations of both the Federal Trade Commission Act and the Telemarketing Sales Rule, for calls to numbers listed on the National Do Not Call Registry.
An Arizona federal court judge granted the FTC's request for a temporary restraining order, which halted the operations of the defendants and froze their assets for potential consumer redress pending further litigation.
To read the complaint and temporary restraining order in FTC v. Advertising Strategies, LLC, click here.
Why it matters: The agency also charged the defendants with using mail-forwarding services to disguise their location and changing business names and addresses to dodge regulators. In one instance, the Arizona Attorney General's office subpoenaed one of the individual defendants to testify about the business. Not only did the individual fail to appear, but the FTC said the defendants also closed the office and moved to a different location.