July 10, 2009
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News: Judge Bans Canadian Telemarketers
A U.S. Federal judge banned a Canadian telemarketing company from conducting business in the United States. Select Personnel Management Inc.; Ontario Limited; Special T Services Group, Inc.; United Registration Services Inc.; along with three individuals James Stewart, Luigi Paulozza and Philip J. Richards have all been banned from operating in the U.S. due to allegations that they were participating in deceptive credit card telemarketing practices. The Federal Trade Commission (FTC) solicited the courts saying the defendants had scammed nearly $7.8 million out of over 12,000 credit card customers telling them they could "substantially reduce" their credit card interest rates. The federal judge slapped a permanent injunction against the defendants and ordered them to pay more than $7.8 million in restitution.
The FTC indicated that the defendants either stated or falsely implied that they were affiliated with credit card companies. Victims of the scam paid $675 plus $20 for shipping and handling for promotional materials along with a "financial profile form" for the customer to complete and return. The complaint indicated that the telemarketing companies promised the consumer that they would negotiate their credit card interest rates to a low as 4.75% saving them at least $2,500. Furthermore, the defendants promised to refund the cost of their services if they were not successful. To add insult to injury, the defendants actually charged their fee to customer's card accounts.
The only services that the defendants actually performed was to set up three way telephone calls between them, the customer, and the customers' credit card companies where they then asked the lender to reduce the client's interest rates. In most cases, the lenders denied the customers' requests. The FTC also accused the defendants of violating the FTC ACT and the Telemarketing Sales Rule (TSR) by "spoofing" the customer's caller id with a false telephone number and by not providing proper identification of the caller.