Business Blog
VoIP where prohibited by law?
The FTC and its law enforcement partners are waging the war against illegal telemarketing on many fronts. An amended complaint in a pending case filed by the FTC and the Ohio Attorney General seeks to hold an additional adversary responsible for violations of the law: Globex Telecom, a VoIP service provider that allegedly played a key role in subjecting consumers to a barrage of illegal calls for a bogus credit card interest rate reduction scheme. Notably, it’s the FTC’s first case against a VoIP service provider under the Telemarketing Sales Rule.
In July 2019, the FTC and Ohio AG filed suit against an outfit called Educare Centre Services and related defendants, including some individuals in Canada. According to the complaint, the company used cold calls and robocalls to claim it could significantly reduce interest rates on consumers’ credit cards and gilded its promise with a 100% money-back guarantee. Consumers shelled out fees of between $798 to almost $1200, but the FTC and AG say people didn’t get the advertised rate reductions. When consumers tried to exercise the money-back guarantee, Educare allegedly stiffed them and often threatened them with collections. According to the lawsuit, consumers were bilked for more than $11.5 million.
So how does VoIP service provider Globex Telecom and its Canadian counterpart, 9506276 Canada, fit into the picture? According to the amended complaint, they provided Educare with the means to make calls to U.S. consumers, including illegal robocalls that pitched Educare’s bogus services. The complaint alleges that Globex and 9506276 Canada assisted and facilitated Educare’s underlying illegal scheme, in violation of the FTC Act and the Telemarketing Sales Rule.
A federal court in Texas has issued a temporary restraining order against Globex and 9506276 Canada, appointed a temporary receiver, and frozen their assets.
Even at this early stage, it bears noting that this is the FTC’s first case charging a VoIP service provider with violations of the Telemarketing Sales Rule. Any business or individual who engages in illegal telemarketing – or who greases the wheels for others’ violations – should be aware of the breadth of liability under the TSR.
Looking for more information about blocking unwanted calls on landlines, mobile phones, and home phones that use VoIP? The FTC has advice for consumers.
It is your choice whether to submit a comment. If you do, you must create a user name, or we will not post your comment. The Federal Trade Commission Act authorizes this information collection for purposes of managing online comments. Comments and user names are part of the Federal Trade Commission’s (FTC) public records system, and user names also are part of the FTC’s computer user records system. We may routinely use these records as described in the FTC’s Privacy Act system notices. For more information on how the FTC handles information that we collect, please read our privacy policy.
The purpose of this blog and its comments section is to inform readers about Federal Trade Commission activity, and share information to help them avoid, report, and recover from fraud, scams, and bad business practices. Your thoughts, ideas, and concerns are welcome, and we encourage comments. But keep in mind, this is a moderated blog. We review all comments before they are posted, and we won’t post comments that don’t comply with our commenting policy. We expect commenters to treat each other and the blog writers with respect.
We don't edit comments to remove objectionable content, so please ensure that your comment contains none of the above. The comments posted on this blog become part of the public domain. To protect your privacy and the privacy of other people, please do not include personal information. Opinions in comments that appear in this blog belong to the individuals who expressed them. They do not belong to or represent views of the Federal Trade Commission.