Markets Wired

A deceptive robocall operation that allegedly used millions of pre-recorded telemarketing messages to fraudulently pitch extended auto warranties to U.S. consumers will pay more than $655,000 in consumer redress and will be permanently banned from telemarketing, as part of a settlement with the Federal Trade Commission.

The company that arranged to blast out auto warranty robocalls, Voice Touch, Inc., and its principal, James A. Dunne, agreed to the terms to settle a complaint filed by the FTC in May 2009. In addition to paying approximately $655,000, Dunne will have to turn over the proceeds from the sale of his second home in Florida and two luxury cars, a Porsche 911 and a Lexus sedan. Dunne and Voice Touch are two of six defendants who were sued by the FTC, which received a flood of complaints as a result of the auto warranty robocalling campaign.

According to the FTC’s complaint, Voice Touch, Inc. and Dunne acted as brokers between telemarketers and the dialing companies that actually made the pre-recorded robocalls. They conducted telemarketing campaigns on behalf of several companies, causing tens of millions of consumers to receive illegal pre-recorded pitches that misled consumers to think that the callers were affiliated with consumers’ car dealership or manufacturer, and that their auto warranty was expiring or about to expire. The FTC previously announced a settlement with Transcontinental Warranty, Inc., a telemarketing company charged with deceptively selling those warranties. (See http://www.ftc.gov/opa/2009/09/twi.shtm.)

The settlement order against Voice Touch and Dunne permanently bars them from both telemarketing and assisting anyone else in telemarketing. It also bars them from making a range of misrepresentations, including:

• that they are affiliated with a consumer’s car manufacturer or dealer;
• that the consumer’s original auto warranty is about to expire;
• that they are authorized to sell, and are selling, auto warranties that will extend the original manufacturer’s warranty;
• that they are selling warranties of any kind;
• the total cost to buy, receive, or use the goods or services they are selling;
• any material restrictions, limitations, or conditions on buying, receiving, or using their services;
• their refund, cancellation, exchange, or re-purchase policies; and
• the performance, effectiveness or any other key characteristics of their goods or services.

Finally, the order requires Dunne to cooperate with the FTC in its ongoing case against the remaining defendants.

The Commission vote authorizing the stipulated final order settling the court action was 4-0. It was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, on March 24, 2010. Also by a 4-0 vote, the FTC has amended the original complaint in this matter to dismiss Maureen Dunne as a defendant. Litigation continues against several Chicago-based defendants in this case: Network Foundations, LLC; Voice Foundations, LLC; and one of their principals, Damian Kohlfeld.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the stipulated final order are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer 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, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

(Voice Touch.wpd)
(FTC File No. X090046; Civ. No. 09-cv-2929)