A robocaller agreed to a permanent ban from all telemarketing-related business as part of a settlement with the Federal Trade Commission over claims that he and his business, The Dolce Group Worldwide, used prerecorded robocalls to sell consumers auto service contracts.
Fereidoun “Fred” Khalilian was “well-known” to the FTC after a 2001 settlement that banned him from all travel-related telemarketing and required him to pay $185,000 for making deceptive travel package pitches.
The new operation, known as My Car Solutions, allegedly used prerecorded robocalls to warn consumers that their car warranties were about to expire. When consumers pressed a button to speak with a representative, they were transferred to a telemarketer who claimed to be from the “service contract department” who asked to “verify” information about the consumer’s car and “confirm” other information, according to the FTC complaint.
Only after consumers purchased the warranties did they learn My Car Solutions was not affiliated with their car manufacturer and the warranties had limited coverage and excluded certain pre-existing conditions, the FTC said. Consumers paid between $1300 and $2845 for each warranty.
Under the terms of the settlement, Khalilian and The Dolce Group are banned from telemarketing or helping others to telemarket, and are prohibited from making any misrepresentations or omissions when selling any goods or services. The settlement included a monetary judgment of $4.2 million, which will be satisfied in part by Khalilian’s turning over corporate and personal property.
To read the complaint in FTC v. Khalilian, click here.
To read the settlement order in FTC v. Khalilian, click here.
Why it matters: The settlement – and permanent ban from telemarketing for the defendant – are the latest action in the FTC’s crackdown on deceptive prerecorded calls. Telemarketers should remember that prior, written consent is now required before robocalls can be made to consumers, regardless of whether a relationship already exists. Companies must also include information at the beginning of the call about how to stop future calls and provide an automated opt-out mechanism as part of the call.