A federal judge recently ordered defendants involved in a deceptive robocalling scheme to pay $30 million in civil penalties and surrender $1.1 million in ill-gotten gains based on violations of the FTC Act and the Telemarketing Sales Rule. The defendants, who operated under the name Cash Grant Institute, made millions of robocalls to consumers falsely claiming that consumers prequalified for cash grants up to $25,000. The calls referred consumers to websites that also boasted false claims. Instead of providing the grants, which are not generally available, the websites referred consumers to other websites where consumers were required to pay to obtain additional information. Typically, the information provided informed consumers that they were not eligible for the grants they were seeking.

As a result of this deceptive scheme, the defendants were ordered to pay civil penalties, were banned from marketing grants, grant-procurement goods or services, and credit-related products. They were also banned from making misrepresentations about goods and services and from violating the Telemarketing Sales Rule. Additionally, they must destroy their customers’ personal information within 30 days and refrain from benefitting from the information.  

This case demonstrates the FTC’s commitment to enforcing its rules regarding robocallers. All companies that engage in telemarketing should be aware of the FTC and FCC rules regarding telemarketing. There are restrictions regarding the use of automatic dialers, pre-recorded messages, accurate Caller ID information, and use of the Do Not Call registry. Failure to adhere to these rules may result in steep fines.