FTC Action Puts Robocallers Out of the Telemarketing Business
Defendants Allegedly Responsible for Billions of Calls; Will Give Up Assets Totaling Roughly $3 Million
The Federal Trade Commission put a robocall operation out of the telemarketing business under a settlement resolving FTC charges that it bombarded consumers with more than two billion calls pitching a variety of products and services, including worthless extended auto warranties and credit card interest rate-reduction programs.
The FTC's
complaint alleged that the defendants delivered illegal prerecorded phone calls falsely claiming the caller had urgent information about the consumer's auto warranty or credit card interest rate. Consumers who pressed "1" for more information were transferred to telemarketers who used fraudulent practices to sell inferior extended auto service contracts or worthless debt-reduction services. According to court papers filed by the court-appointed receiver, from January 2008 through August 2009, the defendants completed approximately 2.6 billion outbound robocalls that were answered by approximately 1.6 billion consumers, approximately 12.8 million of whom were connected to a sales agent.
As alleged in the complaint, the defendants violated the law by using robocalls to contact consumers without their written permission and called telephones listed on the National Do Not Call Registry. To make it difficult for consumers to identify the seller, the FTC also alleged that the defendants' robocalls often transmitted caller ID information vaguely identifying the caller as "SALES DEPT" and displaying telephone numbers registered to an offshore company it controlled called Asia Pacific Telecom.
Under the proposed settlement order, Repo B.V.; SBN Peripherals Inc., doing business as SBN Dials; Johan Hendrik Smit Duyzentkunst; and Janneke Bakker-Smit Duyzentkunst are banned from telemarketing. The order also prohibits them from misrepresenting any good or service, and from selling or otherwise benefitting from customers' personal information, and requires them to properly dispose of customers' personal information within 30 days. The order imposes a $5.3 million judgment that will be suspended, based on their inability to pay, when they have surrendered assets valued at approximately $3 million, including more than $1 million obtained from a bank account in Hong Kong, a $375,000 lien on a home, a 50 percent interest in an office building in Saipan, the defendants' interest in seven parcels of undeveloped land, as well as three cars and a recreational vehicle. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.
The Commission vote approving the proposed consent order was 4-0. It is subject to court approval. The FTC filed the proposed consent order in the U.S. District Court for the Northern District of Illinois, Eastern Division.
NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent orders have the force of law when approved and signed by the District Court judge.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online
Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of
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