Markets Wired

At the Federal Trade Commission’s request, a U.S. district court has approved a settlement shutting down two groups of Florida-based telemarketers that allegedly flooded consumers with misleading pre-recorded robocalls falsely promising to reduce their credit card interest rates.

The agency reached a settlement that permanently bans the two related operations from making robocalls and selling debt relief services. The settlement orders are the latest in a series of enforcement actions the FTC has taken to rein in robocallers, especially those who try to take advantage of consumers affected by the economic downturn.

According to the FTC, JPM Accelerated Services and related defendants made thousands of illegal pre-recorded robocalls to consumers, identifying themselves only as “card services” and offering lower credit card interest rates. Consumers who pressed “1″ after hearing the automated pitch were transferred to live telemarketers who falsely told consumers that JPM’s services would allow them to dramatically lower their credit card interest rates.

The complaint alleged that the telemarketers charged an up-front fee typically ranging from $495 to $995, and promised consumers they would save thousands of dollars in a short period of time as a result of the lower interest rates, and that they would be able to pay off their debts faster. The defendants also falsely stated that if consumers did not save thousands of dollars from lowered interest rates, they would receive a full refund of the up-front fee.

After collecting the fee from consumers, however, JPM allegedly failed to deliver the promised interest rate reductions and savings, and routinely refused to honor its money-back guarantee. The FTC complaint also charged the defendants with violating the Telemarketing Sales Rule by calling consumers on the Do Not Call Registry, blocking or “spoofing” caller ID, and making unlawful robocalls.

The settlement orders also impose judgments of $5.9 million against defendants associated with JPM, and $3.2 million against six individual defendants associated with an affiliated operation called IXE Accelerated Financial Centers, LLC. The judgments represent the amount of money consumers lost through these robocall schemes. The judgments are suspended, based on the defendants’ inability to pay, but will become due if the defendants are found to have misrepresented their financial condition. Two of the defendants in the IXE operation, Ivan X. Estrella and Jaime Hawley, also are liable for an unsatisfied $75,000 judgment recently entered against them in a case brought by the Florida Attorney General.

The Commission vote authorizing the consent orders settling the court action against the individual defendants was 5-0. The orders were filed in the U.S. District Court for Middle District of Florida, Orlando Division on November 9, 2010, against: 1) Ivan X. Estrella, Jamie M. Hawley, and Kimberly Nelson; and 2) Jeanie B. Robertson, Brooke Robertson, Alexander J. Dent, Micha S. Romano, Paul Pietrzak, and Ashley M. Westbrook. Estrella, Hawley, and Nelson worked with the IXE corporate defendants listed below. The rest of the individual defendants worked with the JPM corporate defendants. At the FTC’s request, the court also has dismissed the charges against Paige Dent.

The court is reviewing the FTC’s request for a default judgment against the corporate defendants in this case, including the IXE corporate defendants (IXE Accelerated Financial Centers, LLC; and IXE Accelerated Services Inc.), and the JPM corporate defendants (JPM Accelerated Services Inc.; IXE Accelerated Service Centers Inc.; MGA Accelerated Services Inc.; World Class Savings Inc.; Accelerated Savings Inc.; and B&C Financial Group Inc.). The proposed default judgment includes monetary judgments of $3.2 million against the IXE corporations, based in Orlando, Florida, and $5.9 million against the JPM corporations, based in Melbourne, Florida.

International Cooperation

The FTC brought this action with valuable assistance from other law enforcement agencies in the U.S. and Canada, including: the U.S. Postal Inspection Service; the Attorney General of Florida; the Florida Department of Agriculture and Consumer Affairs; the Canadian Radio-Television and Telecommunications Commission; and the Toronto Strategic Partnership, which includes as member agencies the Competition Bureau Canada; the Toronto Police Service Fraud Squad – Mass Marketing Section; the Ontario Provincial Police Anti-Rackets Section; the Ontario Ministry of Consumer Services; the Royal Canadian Mounted Police; and the United Kingdom’s Office of Fair Trading. Valuable assistance also was provided by the Better Business Bureau of Central Florida.

The FY 2010 National Do Not Call Registry Data Book

The FTC today also issued the National Do Not Call Registry Data Book for Fiscal Year 2010, which can be found on the FTC website and as a link to this press release. In its second year of publication, the Data Book contains a wealth of information about the Registry for FY 2010, including:

• The number of active registrations and consumer complaint figures since the Registry began in 2003;
• FY 2010 complaint figures by month and complaint type;
• FY 2010 registration and complaint figures for all 50 states by population;
• The number of entities accessing the Registry by fiscal year; and
• An appendix on registration and complaint data by consumer state and area code.

According to the Data Book, at the end of FY 2010 (September 30, 2010), the Do Not Call Registry contained 201,542,535 actively registered phone numbers, up from 191,453,515 at the end of FY 2009. In addition, the number of consumer complaints about unwanted telemarketing calls decreased from 1,808,354 at the end of FY 2009 to 1,633,819 at the end of FY 2010.

This year’s Data Book also reveals trends in complaint data. In addition to providing information on the total number of consumer complaints per month, it also has data on the number of monthly complaints specifically related to pre-recorded telemarketing, or robocalls, and requests for a telemarketer to stop calling. After the FTC issued a Rule banning virtually all telemarketing robocalls starting on September 1, 2009, for example, the data show that the number of complaints about such calls decreased from 66,574 in October 2009 to 58,161 in November 2009 and just 51,882 in December 2009. The FTC remains committed to stopping deceptive, misleading, and otherwise unlawful robocalls, and will take action against entities violating the new rule.

Click here for information about the Do Not Call Registry or to register a phone number. Once a number is on the Registry, it never has to be re-registered.

NOTE: The stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of law violations. Stipulated final orders require approval by the court and have the force of law when signed by the judge.

Copies of the stipulated final orders and default judgment are available now on the FTC’s website and as a link to this press release. 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 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

(FTC File No. X100009;
Civ. No. 6:09-cv-2021-ORL-28-KRS)
(JPM Orders.final)