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Washington DC April 2 2014
Take a company called “Landshark,” bogus bank officials and telemarketers who literally will not take “no” for an answer and how can that ever end well?
Five Canadian and American companies worked together to trick American senior citizens into buying about $20 million in bogus services, the Federal Trade Commission said Monday as it announced a lawsuit and a court order shutting the companies down pending trial.
In some cases, the telemarketers didn’t bother getting approval for a sale, the FTC charged: They just took the money from consumers’ accounts without their knowledge.
Callers tricked seniors into revealing bank account and routing numbers during calls in which telemarketers posed as government, bank or insurance officials.
Callers sometimes got consumers to agree to purchase products like fraud protection by scaring them into thinking their accounts were under threat.
But whether they were selling fraud protection or medical discount plans, the FTC said, the prices quoted were often substantially lower than the $187 to $397 payments the companies took from consumers’ accounts between May 2011 and December 2013.
Telemarketing companies are required to keep recordings of calls that show a purchase was authorized, but the FTC says the companies got around that by leading consumers through a series of questions designed to have them answer “yes.” Callers went so far as to instruct consumers they were required to answer with a yes.
Not surprisingly, some consumers only realized they’d made a purchase when they saw the debits on their bank statements.
The suit said the defendants created a “labyrinth” of shell companies to avoid detection by banks and payment processors, which often terminate agreements with companies that have high dispute rates.
Companies named in the FTC suit are First Consumers in Pennsylvania; Standard American Marketing, dba Trust One Services, in Arizona; PowerPlay Industries in Florida; and two Quebec companies, Landshark Holdings and Madicom. A federal court in Pennsylvania issued the preliminary injunction closing the operations.
The suit also names Ari Tietolman, a Quebec man the FTC says played key roles in all the companies.
There are plenty of lessons consumers can draw from this one:
• Never reveal a bank account or routing number to anyone who calls you. Your bank already knows your account number, and no one from the government will call you to ask.
• Check your bank statements carefully every month. It’s easier to get fraudulent payment back – and head off additional payments – if you report the problem right away.
• If you suspect a call isn’t on the level, or spot a fraudulent debit or charge, report the scheme to the FTC right away at ftc.gov or 1-877-382-4357.
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