Markets Wired

An Orlando-based telemarketing company and its owner have agreed to settle Federal Trade Commission charges that they made millions of illegal robocalls and calls to numbers on the National Do Not Call Registry to pitch vacation packages.

Because the calls were so cheap to make – less than a cent each – defendants could profitably call more than 100,000 consumers for every vacation package sold. As a result, Lilly Management and Marketing and its owner, Kevin Lawrence, bombarded consumers with illegal calls, even after both the Better Business Bureau and the FTC contacted them about their abusive conduct.

“We’ve halted this intrusive and troubling unlawful robocalling campaign and deprived defendants of the full revenues they obtained,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

The FTC’s complaint charges Lilly and Kevin W. Lawrence with violating the TSR by making millions of illegal robocalls to sell packages offered by a number of vacation package companies. Lilly also called consumers whose phone numbers were on the Do Not Call Registry and called consumers who had asked not to be called again, the complaint alleges.

Operating under the name “USA Vacation Station,” the complaint alleges Lilly bought leads – lists of consumers’ telephone numbers – from third parties. It then used automated dialing machines to call those telephone numbers, placing millions of calls that played pre-recorded messages. If a consumer picked up, listened to the pitch, and pressed “one,” they were transferred to a sales agent who tried to sell them a “magical Walt Disney World area holiday special” for which they “had been selected.”

The proposed civil penalty order permanently bans the defendants from robocalling consumers and prohibits the defendants from calling consumers whose phone numbers are on the DNC Registry, assisting others in making such calls, or doing business with anyone making such calls. The settlement also prohibits Lilly and Lawrence from calling consumers who have asked that they not be called again.

The proposed order imposes a $1.2 million civil penalty, of which the defendants will pay $19,000 due to their inability to pay the full amount. If they are later found to have misrepresented their financial condition to the FTC, the full amount of the penalty will become due.

The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the proposed civil penalty order was 4-0. The DOJ filed the complaint and proposed order on behalf of the Commission in U.S. District Court for the Middle District of Florida.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. Civil penalty orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.