On May 20, 2008, the Federal Trade Commission announced the largest telemarketing fraud sweep it has ever organized, encompassing more than 180 cases in the United States and Canada .
The initiative, dubbed “Operation Tele-PHONEY,” involved 13 allegedly fraudulent telemarketing scams. Also included are more than 80 state law enforcement actions, more than 90 criminal actions, and eight cross-border actions brought by Canada ’s Competition Bureau and the British Columbia Business Practices and Consumer Protection Authority.
The 13 alleged scams announced on May 20 involved more than 500,000 consumers defrauded of more than $100 million, according to the FTC. The cases involved a variety of alleged telemarketing scams, as described below. Each federal district court complaint can be found on the FTC’s Web site.
- Med Provisions: A Canadian operation that allegedly got U.S. consumers to pay $389 for a worthless medical discount package.
- Union Consumer Benefits: Another Canadian scam in which the defendants debited $399 from consumers’ bank accounts in exchange for a worthless prescription discount card.
- Steven Breitling/ICS Financial Firm: Consumers paid a $75 fee for a “guaranteed” loan which they never received.
- American Financial Card, Inc., Integrity Financial Enterprises, and Financial Advisors & Associates: In three separate advance-fee scams, consumers paid several hundred dollars for a general use credit card. Consumers never received the promised card. Instead, they received a card that could be used only to buy items from the defendants’ catalog.
- Handicapped & Disabled Workshops, Inc., and Helping Hands of Hope: In two separate scams, elderly consumers were charged for unordered household products or were fraudulently told that their purchases would help handicapped or disabled workers employed by the defendants.
- U.S. Magazine Services: Consumers were misled about monthly subscription charges for various publications.
- Publishers Business Services: Consumers were billed several hundred dollars for magazine subscriptions that they were initially told were “free” or low-cost. Defendants then tried to extort payment by harassing the consumers at work, threatening to initiate collection actions, or threatening to submit derogatory information about them to the major credit bureaus.
- NHS Systems, Inc.: Defendants deceived consumers into providing bank account information, then charged them $29.95, $299.95, or both, for a “discount health care program” to which they never agreed.
- City West Advantage, Inc. d/b/a Unified Services: Defendants fraudulently informed consumers that they had won a $1,000 shopping spree, then persuaded consumers to provide bank account information to pay $1.95 for shipping and handling. Instead, consumers were charged $149 for a worthless “gift.”
- Direct Connection Consulting, Inc./Suretouch LLP: Using a variety of fraudulent promises and pitches, the defendants charged consumers’ credit cards or debited their bank accounts. In exchange, consumers received nothing.