Antitrust Law Daily FTC, Florida AG obtain TRO in illegal robocall suit
Tuesday, June 14, 2016

FTC, Florida AG obtain TRO in illegal robocall suit

By Greg Hammond, J.D.

The FTC and Florida Attorney General have been granted a temporary restraining order by the federal district court in Orlando, shutting down an alleged Orlando-based illegal robocall operation that has purportedly bilked more than $15.6 million from consumers since 2013 (FTC v. Life Management Services of Orange County, LLC, Dkt. 6:16-cv-982-Orl-41TBS, File No. 152 3216).

According to the complaint, Life Management Services of Orange County, LLC—in addition to 12 other companies and seven individuals—engaged in a telemarketing scheme that defrauded financially distressed consumers by selling them two types of phony debt relief services, including credit card interest-rate-reduction services and credit card debt-elimination services. The defendants purportedly sold these services by falsely guaranteeing that consumers would get substantially and permanently lower interest rates on their credit cards, or access to a government fund to pay off consumers’ credit card debt. In addition to allegedly making hundreds of thousands of illegal telephone calls to consumers, the complaint asserts that the defendants requested or received up-front payments ranging from $500 to $5,000 for their supposed rate-reduction services, amounting to "well over $15.6 million dollars" since January 2013. However, consumers did not receive what they were promised, the FTC and Florida Attorney General argue.

The defendants violated the FTC Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule (TSR), and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), according to the complaint.

In granting the temporary restraining order, the court determined that there is good cause to believe that the defendants violated the TSR and FDUTPA; immediate and irreparable harm would result from the defendants’ ongoing violations; individual defendants have received funds that can be traced directly to the alleged deceptive acts or practices; immediate and irreparable damage to the court’s ability to grant effective final relief for consumers would occur from the sale, transfer, destruction, or other disposition or concealment of assets, documents, records, or other evidence absent a temporary restraining order; and it is in the public interest that the court issue the temporary restraining order.

Consequently, the defendants are prohibited from misrepresenting: (1) that consumers who use the defendants’ services will have their credit-card interest rates reduced substantially and permanently, will save thousands of dollars in a short time, or will be able to pay off their credit-card debts much faster; (2) that the defendants can obtain money from a government fund, paid for by credit-card companies, that the defendants will use to pay off consumers’ credit-card debts within 18 months; (3) that the defendants are representatives of, or otherwise affiliated with, consumers’ banks or other credit-card associations such as MasterCard and Visa; or (4) any other material fact regarding goods or services.

The defendants are also prohibited from initiating or assisting others in initiating an outbound telephone call: that misrepresents any material aspect of any debt relief product or service or an affiliation with consumers’ banks or other credit-card issuers; that fails to disclose that any debt relief product or service might result in a consumer having to pay additional fees to a credit-card issuer; to a person whose telephone number is on the National Do Not Call Registry; or that delivers a prerecorded message.

The temporary restraining order also froze the defendants’ assets, appointed a temporary receiver, and ordered the defendants to cooperate with the receiver.

"This is the latest effort by the FTC and our international, state, and federal law enforcement partners to stop illegal robocalling operations that harass consumers day and night with unwanted calls," stated Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

The FTC noted that this is the 39th action taken since January 2015 as part of a coordinated multinational enforcement effort to halt robocall operations.

Companies: Life Management Services of Orange County, LLC

MainStory: TopStory ConsumerProtection StateUnfairTradePractices FederalTradeCommissionNews

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