Markets Wired

Two brothers and the companies they ran have settled a federal district court complaint brought by the Federal Trade Commission and litigated by the Department of Justice, that charged them with running a telemarketing operation that made millions of illegal robocalls promising consumers energy savings in order to generate leads to sell to solar panel installation companies.

The stipulated court order settling the charges permanently bans the corporate defendants and one of the brothers from all telemarketing, bars the other brother from violating the FTC’s Telemarketing Sales Rule (TSR), and requires the defendants to pay $155,000.

According to the complaint, announced in March 2016, Francisco Salvat and his companies placed millions of illegal pre-recorded telemarketing calls to consumers on the Do Not Call Registry. The defendants allegedly claimed to be a non-profit organization trying to help consumers reduce their energy costs. Francisco’s brother, Julio Salvat, a co-owner of the companies, was later added to the case.

The FTC alleged the defendants’ robocalls made statements such as: “This is an urgent call about your energy bill,” and “stop the 14% increase coming soon.” Consumers were told to press “1” to lower their electric bill. Those who did were transferred to a telemarketer who asked if they were also interested in solar panels.

According to the complaint, if the consumer said yes, the telemarketer scheduled an appointment with a private solar installation company and sold the consumer’s information to that company as a customer lead. The defendants allegedly sent phony caller ID information and often continued to call consumers even after they asked not to be called again.

The court order announced today resolves charges the defendants violated the TSR by: 1) calling consumers whose numbers are on the DNC Registry; 2) continuing to call consumers who had previously asked not to be called; 3) failing to transmit accurate caller ID information; and 4) making illegal robocalls.

It permanently bans Francisco Salvat and the companies he controlled from telemarketing, and bars Julio Salvat, as an officer of the companies, from violating the TSR, including prohibiting him from calling consumers whose phone numbers are on the DNC Registry and robocalling consumers without their written consent. Julio Salvat also is banned from selling lists containing phone numbers of consumers on the DNC Registry and violating the caller ID provisions of the Registry rules. Finally, the order imposes a civil penalty of $1.4 million against the defendants, which will be partially suspended upon payment of $155,000.

The Commission vote approving the proposed stipulated final order was 2-0. The proposed order was filed in the U.S. District Court for the Central District of California, and has now been signed by the judge. It resolves the FTC’s charges against KFJ Marketing, LLC; Sunlight Solar Leads, LLC; Go Green Education; and Francisco J. Salvat and Julio E. Salvat, individually and as officers of the corporate defendants. The FTC appreciates the assistance of the Department of Justice in litigating this matter on its behalf.

NOTE: Stipulated final orders or injunctions, etc. have the force of law when approved and signed by the District Court judge.

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