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The Federal Trade Commission today once again warned consumers to be wary of telemarketers and to "Ditch the Pitch." The agency announced a settlement with Canadian-based defendants, who allegedly defrauded hundreds of consumers by pressuring them over the phone to purchase essentially worthless "credit card protection" insurance for up to $369.

The Commission filed its complaint in October 2001 as part of the FTC's "Operation Ditch the Pitch" law enforcement initiative, which targeted deceptive out-bound (cold-call) telemarketers and sellers. The settlement announced today ends the FTC's litigation against Icon America, Inc. (Icon); 9066-3451 Quebec, Inc. doing business as Sierra Enterprises; Mete Suatac; and Jonathan Parkinson. According to the Commission, the individual defendants, who are based in Canada, have few remaining assets, and the corporate entities are no longer in business.

According to the FTC's complaint, the defendants used telemarketing to sell credit card loss protection to consumers for prices ranging from $299 to $369. Using scare tactics, the defendants allegedly claimed that consumers' credit card numbers were available on the Internet and accessible to criminals, and that the consumers would be held liable for any unauthorized charges, if anyone gained access to this information. The complaint stated that Icon representatives told consumers that the company's loss protection services would cover any unauthorized charges due to such theft.

In addition, Icon falsely led some consumers to believe that the defendants were calling from, or on behalf of, the consumer's credit card company, thereby gaining their trust under false pretenses. The complaint also alleged that the defendants promised, but did not provide, a 30-day unconditional refund.

Terms of the Stipulated Order

Under the terms of the stipulated final order, which is subject to court approval, the defendants and their principals are barred from: 1) making the types of misrepresentations alleged in the complaint; 2) violating the TSR or assisting others in doing so; and 3) selling or transferring their customer lists. The order also contains a suspended judgment for $1.5 million, the amount of Icon's gross sales and the approximate amount of consumer injury, and requires the defendants to pay $25,000 that the Commission may use for consumer redress. Finally, the order provides that FTC staff may reopen the judgment against the defendants if the court finds the defendants either materially misrepresented their assets or omitted anything from their sworn financial statements.

The Commission vote to file the stipulated final judgment was 5-0. The judgment was received for filing in the U.S. District Court for the District of Vermont on January 28, 2003.

(FTC File No.X020009)
(Civ. Action No. 2:01-CV-320)

Contact Information

Media Contact:
Mitchell J. Katz,
Office of Public Affairs
Staff Contact:
Robin E. Eichen or Barbara Anthony,
FTC Northeast Region - New York