Hate illegal robocalls? You’re not alone. The FTC hates them, too, as do state Attorneys General and pretty much anyone with a phone. The FTC and state and federal partners teamed up today to announce Operation Call it Quits, the latest salvo in the ongoing fight against robocalls and other illegal telemarketing. We also have tips on how you can help hang up on what many people consider to be Consumer Protection Enemy #1.
First, some background on the battle. Whether it was a friendly call that a prescription was ready or a flight was delayed, robocalls had an innocent start. But soon enough, con artists weaponized them. When the robocall plague began, the FTC moved quickly to amend the Telemarketing Sales Rule to ban robocall sales pitches unless companies have consumers’ express written permission to call. That means if you get a robocall trying to sell you something, the people who call you – and the people who hired them – are violating the law. Furthermore, the vast majority of those calls are fronting for fraudsters, which is no surprise. If a company breaks the law to contact you, what are the chances they’re pitching anything legit? Not likely.
Add Operation Call it Quits to the totals and so far the FTC has brought 145 cases against 479 companies and 387 individuals responsible for illegal calls. The states have filed many actions, too. And yet we continue to get 10,000 complaints every day about unwanted calls. Why? Because robocallers are a brazen bunch. In it for a fast buck, they know what they’re doing is illegal and yet they persist.
But they’re not the only persistent ones. The FTC’s contribution to Operation Call it Quits includes four new cases against 22 individuals and corporations and court orders in three pending actions. Here’s the low-down on the operators the FTC says inundated consumers with illegal calls.
- First Choice Horizon. According to the FTC, nine defendants operated a labyrinth of operations that used robocalls to pitch bogus offers of credit card interest rate reductions to cash-strapped consumers, including many whose numbers were on the National Do Not Call Registry. Claiming during the calls to “confirm” consumers’ identities, the defendants allegedly tricked people into turning over personal financial information and then often opened credit card accounts in their names. A federal court in Florida has entered a temporary restraining order and granted the FTC’s request for an asset freeze and the appointment of a receiver.
- 8 Figure Dream Lifestyle. The FTC has sued nine defendants for allegedly dishing up a deceptive stew of illegal robocalls, live calls, text messages, online ads, email, social media, and live events to pitch purported money-making opportunities under the names 8 Figure Dream Lifestyle and Online Entrepreneur Academy. Often claiming people could make between $5,000 to $10,000 in just two weeks, the defendants allegedly bilked them out of thousands of dollars, leaving many consumers even deeper in debt. A California court has entered a temporary restraining order and frozen the defendants’ assets.
- Derek Jason Bartoli. When it comes to illegal robocalls, teamwork makes the scheme work and the FTC continues to take action against behind-the-scenes players. The FTC alleges one go-to guy was defendant Bartoli, who developed and operated autodialers to blast out robocalls. In one six-month period, Bartoli sent more than 57 million illegal calls, often using fake Caller ID information. A proposed settlement bans him for life from robocalling, prohibits other practices, and imposes a $2.1 million penalty, which will be suspended based on his financial condition.
- Media Mix 365. The three defendants in this case called consumers to develop leads for home solar energy companies, but according to the FTC, their conduct was shady. The complaint alleges they called millions of numbers on the National Do Not Call Registry, frequently with the intent to annoy, abuse, or harass consumers. One number received more than 1,000 calls in a single year. To settle the case, the defendants are permanently banned from robocalling and from engaging in other illegal conduct. The $7.6 million civil penalty will be suspended after a payment of $264,000.
The FTC also announced settlements in three pending actions. The FTC and Florida AG filed suit in 2015 against Lifewatch, a Lynbrook, New York, outfit that falsely told older consumers they could claim a “free” medical alert system bought for them by a family member or medical professional. The defendants used pre-recorded messages designed to sound like a real person was on the line and falsely claimed their products were endorsed by groups like the American Heart Association or AARP. Among other things, the court order bans certain defendants for life from telemarketing and imposes total judgments of $25.2 million, which will be partially suspended upon the payment of $2 million. The order also requires them to notify all current customers about the case and give them the opportunity to cancel their service.
In addition, the FTC announced a settlement with one defendant in its 2018 lawsuit against Redwood Scientific, which used robocalls to deceptively market dissolvable strips of film touted for smoking cessation, weight loss, and sexual performance. The complaint also alleged the defendants enrolled consumers in auto-shipment programs without their permission. In addition to other provisions, the settlement permanently bans Danielle Cadiz, the company’s former Director of Operations, from robocalling, including the use of ringless voicemails. The $18.2 million judgment against her will be suspended based on her inability to pay.
A court order in another action – the FTC and Florida AG’s 2016 lawsuit against Florida-based Life Management Services – bans 17 people for life from telemarketing. The defendants bombarded consumers with illegal robocalls for bogus credit card interest rate reduction services. The settlement imposes a judgment of $23.1 million, which will be suspended when they turn over virtually all of their assets. The FTC and AG won summary judgment and monetary relief against ringleader Kevin Guice in December 2018.
Those cases make up only one part of Operation Call it Quits. Twenty-five federal, state, and local law enforcement partners have brought another 87 enforcement actions. Five of them are criminal cases brought by U.S. Attorney's Offices and TIGTA, Treasury Inspector General for Tax Administration.
Law enforcement will continue to be a key component in the fight against illegal calls, but technology may be part of the solution, too. That’s why we’re working with industry to help innovate an end to illegal robocalls. So far we’ve sponsored four public challenges to promote the development of call-blocking tools. We’ve gone from a handful of products on the market to hundreds, including two of our contest winners. And starting in August 2017, we began the daily public release of Caller ID numbers identified in Do Not Call complaints so apps and telecom carriers can use the information to block unwanted calls. Another development on the horizon: a new system to help combat spoofing and restore confidence in the Caller ID system – an industry effort the FTC supports.
Of course, illegal calls have a human cost, too. A recent report recounted the potentially life-threatening impact robocalls are having on hospital phone lines. And businesses tell us that staff time and resources are wasted by intrusive calls. That’s why a total of 45 federal, state, and local partners are spreading the word from coast to coast about three key steps consumers can take to help reduce unwanted calls: Hang up. Block. Report.
- Hang up. If you pick up the phone and get a recorded sales pitch, hang up. The call is illegal. Don’t speak to them. Don’t press a button to supposedly remove your name from a list. (That could result in even more calls.) Hang up. Furthermore, alert your employees that if they see a call that says it’s from the IRS or Social Security Administration, don’t trust it. Scammers know how to fake the Caller ID information.
- Block. You can reduce the number of unwanted calls you get by using call-blocking technologies. Visit ftc.gov/calls for advice, depending on the type of phone service you have.
- Report. After you hang up, report the unwanted or illegal call to the FTC at ftc.gov/complaint. The more information we have about the call, the better we can target our law enforcement efforts.
The FTC has new multimedia resources, including videos and shareable graphics, with tips on battling back against unwanted calls. And if it’s time to double-check your own company’s telemarketing efforts, read the Complying with the Telemarketing Sales Rule.