FTC Obtains Restraining Orders, Files Suit to Stop Robocalls

Lora Bentley

Better consumer protection is high on the Federal Trade Commission's action plan right now; the agency's recent activities demonstrate that. In addition to overseeing blogger disclosure of paid endorsements and working on how to best regulate online privacy practices, particularly where behavioral advertising is concerned, the FTC is also "cracking down" on robocalls.


eWEEK reported Tuesday that the FTC has filed lawsuits and received temporary restraining orders against three companies accused of making "hundreds of thousands, or even millions" of illegal robocalls and swindling consumers out of money. The agency explained the situation this way:

[D]efendants made illegal pre-recorded robocalls... [that] allegedly claimed the defendants' services could lower the interest rate on consumers' credit cards. In each case, consumers who pressed 1 after hearing the automated call were transferred to live telemarketers who allegedly misrepresented that consumers could dramatically lower the rates on their credit card... The defendants then falsely stated that if consumers did not save a "guaranteed" amount-typically $2,500 or more-they could get a full refund of the up-front fee.

After the companies -- Economic Relief Technologies, Dynamic Financial Group, and JPM Accelerated Services -- received the up-front fee, however, they allegedly did nothing to negotiate lower rates, and they very seldom gave refunds to consumers who were not satisfied with the services.


In the FTC's view, such activity violates not only the Do Not Call rules, but also the FTC Act and the agency's telemarketing regulations. Chairman Jon Leibowitz said of the lawsuits:

The FTC has heard the public outcry against robocalls and has taken swift action to stop them. During these difficult economic times, the last thing anyone needs is to be bombarded by robocalls pitching worthless interest-rate reduction programs.

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