UNITED STATES DISTRICT COURT
DISTRICT OF VERMONT

FEDERAL TRADE COMMISSION, Plaintiff,

v.

ICON AMERICA, INC., a Florida corporation,
METE SUATAC, individually and doing business as ICON AMERICA, INC., and
JONATHAN PARKS, individually and doing business as ICON AMERICA, INC., Defendants

Civil No.

COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE  RELIEF

Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), for its complaint alleges:

1. The FTC brings this action under Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.  53(b) and 57b, and the Telemarketing and Consumer Fraud and Abuse Prevention Act ("Telemarketing Act"), 15 U.S.C. 6101 et seq., to obtain permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for defendants' deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a), and the FTC's Trade Regulation Rule entitled "Telemarketing Sales Rule," 16 C.F.R. Part 310.

JURISDICTION AND VENUE

2. Subject matter jurisdiction is conferred upon this Court by 15 U.S.C. 45(a), 53(b), 57b, 6102(c), and 6105(b) and 28 U.S.C. 1331, 1337(a), and 1345.

3. Venue in the District of Vermont is proper under 15 U.S.C.  53(b) and 28 U.S.C.  1391(b), (c), and (d).

PLAINTIFF

4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute. 15 U.S.C. 41 et seq. The Commission enforces Section 5(a) of the FTC Act, 15 U.S.C.  45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission also enforces the Telemarketing Sales Rule ("TSR" or "the Rule"), 16 C.F.R. Part 310, which prohibits deceptive or abusive telemarketing practices. The Commission may initiate federal district court proceedings by its own attorneys to enjoin violations of the FTC Act and the TSR and to secure such equitable relief as may be appropriate in each case, including restitution for injured consumers. 15 U.S.C.  53(b), 57b and 6105(b).

DEFENDANTS

5. Icon America, Inc. ("Icon America"), a Florida corporation with its principal places of business in Swanton, Vermont and Hollywood, Florida, telemarkets credit card protection services. Icon America transacts or has transacted business in the District of Vermont.

6. Defendant Mete Suatac is an officer or director of, and does business as, Icon America. Individually or in concert with others, he formulates, directs, participates or controls the acts and practices of Icon America, including the acts and practices complained of herein. He transacts business in the District of Vermont.

7. Defendant Jonathan Parks is the general manager of, and does business as, Icon America. Individually or in concert with others, he formulates, directs, participates or controls the acts and practices of Icon America, including the acts and practices complained of herein. He transacts business in the District of Vermont.

COMMERCE

8. At all times relevant to this complaint, defendants have maintained a substantial course of business in the offering for sale and sale, through telemarketing, of credit card protection services, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

DEFENDANTS' BUSINESS PRACTICES

9. Since at least 1999, defendants have telemarketed credit card protection services to consumers throughout the United States. Defendants have engaged in these practices under the name Icon America.

10. To induce consumers to purchase credit card protection services, defendants have represented, either expressly or by implication, that defendants are calling for Visa, MasterCard, or the consumer's credit card issuer. Defendants have also represented that recent changes in the law requires the purchase of services such as those being offered by defendants.

11. Defendants have told consumers that criminals are stealing consumers' credit card numbers via the Internet and other technology, and that consumers need to purchase defendants' credit card protection service because consumers are not currently protected against unauthorized use of their credit card accounts by such criminals. Defendants have claimed that, if a consumer's credit card number is stolen or misappropriated, a consumer can be held fully liable for any unauthorized charges to the consumer's credit card account.

12. Defendants have claimed that purchase of their credit card protection service protects consumers from liability for unauthorized credit card charges.

13. Defendants have claimed that there is a thirty (30) day unconditional money back guarantee covering the purchase of their credit card protection services.

14. In numerous instances, defendants do not disclose promptly, or in a clear and conspicuous manner, that the purpose of the call is to sell the consumer the defendants' credit card protection services.

15. Defendants have persuaded consumers to divulge their credit card numbers by high pressure tactics, by telling consumers that defendants need the numbers for verification purposes, by reciting one or more of the first digits of consumers' credit card account numbers and then requesting the consumer to state the remaining digits of the consumers' credit card account numbers, or by reciting the consumers' entire credit card account numbers.

16. Defendants have obtained consumers' credit card account numbers and, without consumers' authorization, have caused charges to be posted on those accounts.

17. Defendants have charged consumers fees ranging from $299 to $369 for their services.

VIOLATIONS OF SECTION 5 OF THE FTC ACT

18. Section 5(a) of the FTC Act, 15 U.S.C.  45(a), prohibits unfair or deceptive acts and practices in or affecting commerce.

COUNT I

19. In numerous instances, in connection with the offering of credit card protection services to consumers, or in the course of billing, attempting to collect, or collecting money from consumers, defendants have made various representations, expressly or by implication, including but not limited to the following:

a. Defendants are affiliated with, or are calling from or on behalf of, the consumer's credit card company or issuer;
 
b. If consumers do not purchase defendants' services, consumers can be held fully liable for any unauthorized charges made to their credit card accounts;
 
c. Defendants will refund the purchase price if for any reason a consumer seeks a refund within 30 days of purchase; or
 
d. Consumers have given authorization for their credit card accounts to be charged for defendants' services.

20. In truth and in fact:

a. Defendants are not affiliated with, or calling from or on behalf of, the consumer's credit card company or issuer;
 
b. Under Section 226.12(b) of Regulation Z, 12 C.F.R.  226.12(b), and Section 133 of the Truth in Lending Act, 15 U.S.C.  1643, a consumer cannot be held liable for more than $50 for any unauthorized charges to a credit card account;
 
c. In numerous instances, defendants do not refund the purchase price when a consumer seeks a refund within 30 days of purchase; and
 
d. In numerous instances, consumers have not given authorization for their credit card accounts to be charged for defendants' services.

21. Therefore, defendants' representations, as set forth in paragraph 19, are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. 45(a).

COUNT II

22. In numerous instances, defendants cause consumers' credit card accounts to be charged for defendants' services without having previously obtained the consumers' authorization for such charge. Many such consumers have never been advised that their credit card accounts would be charged, or have advised defendants that they did not agree to purchase the defendants' services. Therefore, consumers cannot reasonably avoid the defendants' billing for these services.

23. Defendants' practice of charging consumers' credit card accounts without authorization causes substantial injury to consumers that is not outweighed by countervailing benefits to consumers or competition.

24. Therefore, defendants' practice, as outlined above, is unfair and violates Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

THE FTC'S TELEMARKETING SALES RULE

25. In the Telemarketing Act, 15 U.S.C.  6101, et seq., Congress directed the Commission to prescribe rules prohibiting deceptive and abusive telemarketing acts or practices. On August 16, 1995, the Commission promulgated the TSR, 16 C.F.R. Part 310. The TSR became effective on December 31, 1995.

26. Defendants are "sellers" or "telemarketers" engaged in "telemarketing," as those terms are defined in the TSR, 16 C.F.R. 310.2(r), (t), and (u).

27. The Rule prohibits telemarketers and sellers from misrepresenting any material aspect of the performance, efficacy, nature, or central characteristics of the goods or services that are the subject of the sales offer. 16 C.F.R.  310.3(a)(2)(iii).

28. The Rule prohibits telemarketers and sellers from "making a false or misleading statement to induce any person to pay for goods or services." 16 C.F.R. 310.3(a)(4).

29. The Rule also requires telemarketers using outbound calls to disclose promptly in a clear and conspicuous manner to the person receiving the call that the purpose of the call is to sell goods or services. 16 C.F.R.  310.4(d)(2).

30. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. 6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C. 57a(d)(3), violations of the TSR constitute unfair or deceptive acts or practices in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

VIOLATIONS OF THE TELEMARKETING SALES RULE

COUNT III

31. In numerous instances, in connection with the telemarketing of credit card protection services to consumers, defendants have represented, directly or by implication, that if consumers do not purchase defendants' services, consumers can be held fully liable for any unauthorized charges made to their credit card accounts.

32. In truth and in fact, under Section 226.12(b) of Regulation Z, 12 C.F.R.  226.12(b), and Section 133 of the Truth in Lending Act, 15 U.S.C.  1643, a consumer cannot be held liable for more than $50 for any unauthorized charges to a credit card account.

33. Therefore, defendants' representations, as alleged in Paragraph 31, are deceptive telemarketing acts or practices in violation of Section 310.3(a)(2)(iii) of the Telemarketing Sales Rule, 16 C.F.R.  310.3(a)(2)(iii).

COUNT IV

34. In numerous instances, in connection with the telemarketing of credit card protection services, or in the course of billing, attempting to collect, or collecting money from consumers, defendants have made various representations, directly or by implication, including but not limited to the following:

a. Defendants are affiliated with, or are calling from, or on behalf of, the consumer's credit card company or issuer;
 
b. Defendants will refund the purchase price if for any reason a consumer seeks a refund within 30 days of purchase; or
 
c. Consumers have given authorization for their credit cards to be charged for defendants' services.

35. In truth and in fact:

a. Defendants are not affiliated with, or calling from, or on behalf of, the consumer's credit card company or issuer;
 
b. In numerous instances, defendants do not refund the purchase price when a consumer seeks a refund within 30 days of purchase; or
 
c. In numerous instances, consumers have not given authorization for their credit cards to be charged for defendants' services.

36. Therefore, defendants' representations, as alleged in paragraph 34, constitute false or misleading statements to induce a person to pay for goods or services, and are deceptive telemarketing acts or practices in violation of Section 310.3(a)(4) of the TSR, 16 C.F.R.  310.3(a)(4).

COUNT V

37. In numerous instances, in connection with the telemarketing of credit card protection services, defendants have failed to disclose promptly and in a clear and conspicuous manner that the purpose of the telemarketing call is to sell goods or services, in violation of Section 310.4(d)(2) of the TSR, 16 C.F.R.  310.4(d)(2).

CONSUMER INJURY

38. Consumers in many areas of the United States have suffered substantial monetary loss as a result of defendants' unlawful acts or practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

39. Section 13(b) of the FTC Act, 15 U.S.C.  53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement and restitution, to prevent and remedy any violations of any provision of law enforced by the Commission.

40. Section 19 of the FTC Act, 15 U.S.C.  57b, and Section 6(b) of the Telemarketing Act, 15 U.S.C. 6105(b), authorize this Court to issue a permanent injunction and grant such relief as the Court finds appropriate to halt and redress injury resulting from defendants' violations of the Telemarketing Sales Rule, including the rescission and reformation of contracts, and the refund of money.

41.  This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by defendants' law violations.

PRAYER FOR RELIEF

WHEREFORE, plaintiff the Federal Trade Commission, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C.  53(b) and 57b, Section 6(b) of the Telemarketing Act, 15 U.S.C. 6105(b), and the Court's own equitable powers, requests that the Court:

1. Award plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action and to preserve the possibility of effective final relief;
 
2. Permanently enjoin defendants from violating the FTC Act and the TSR as alleged herein;
 
3. Award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the Telemarketing Sales Rule and the FTC Act, including but not limited to, rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; and
 
4. Award plaintiff the costs of bringing this action and reasonable attorneys' fees, as well as such other and additional relief as the Court may determine to be just and proper.

Dated at Burlington, in the District of Vermont, this ______ day of October, 2001.

Respectfully submitted,

UNITED STATES OF AMERICA

PETER W. HALL
United States Attorney

By:

PAUL J. VAN DE GRAAF
Chief, Civil Division
P.O. Box 570
Burlington VT 05402-0570
(802) 951-6725

WILLIAM E. KOVACIC
GENERAL COUNSEL

BARBARA ANTHONY
REGIONAL DIRECTOR

DATED

:_____________________
ROBIN E. EICHEN (RE 2964)
Attorney for Plaintiff
Federal Trade Commission
Northeast Region
One Bowling Green, Suite 318
New York, NY 10004
telephone (212) 607-2803
facsimile (212) 607-2822