The Federal Trade Commission filed suit against Marketing Response Group, Inc. ("MRG") and its officers and affiliates for allegedly acting with numerous telemarketers nationwide to defraud consumers with direct mail promotions that falsely promise quick land sales, guaranteed awards, and free vacations. According to the FTC, MRG devises the promotions, creates the standard mail pieces, selects the mailing lists, and then prints, addresses, and mails the deceptive solicitations on behalf of its client-telemarketers. The FTC is seeking preliminary and permanent injunctions, funds to redress consumers victimized by the deceptive practices, and other relief.
According to Jodie Bernstein, Director of FTC's Bureau of Consumer Protection, "The FTC is committed to pursuing the operators behind the scams...those who orchestrate the frauds perpetrated by the telemarketers on the front lines. Stopping those at the center of the scams is one of our highest priorities."
In addition to MRG, the FTC complaint detailing the charges names two Tampa, Florida-area businessmen -- Peter J. Porcelli, Jr., and William S. Kilichowski -- and four other companies they operate: Marketing Response Group and Laser Company, Inc., Service Bureau International, Inc., Pete-Nik Holdings, Inc., and Palm Harbor Holdings, Inc. The companies all operate out of the Tampa area.
According to the complaint, since at least 1989, the defendants have created, printed and mailed solicitations containing false representations in connection with land sales, guaranteed awards, and vacation promotions. The FTC charges that the defendants continue to mail these deceptive solicitations, even after the FTC and numerous states brought telemarketing fraud cases against several of their clients. (The FTC noted that it had brought cases against Fitness Express, Passport International, Pioneer Enterprises, and Nishika Corporation -- all of whom were defendants' clients.)
The defendants' land sales solicitations allegedly represent that buyers have contacted the telemarketer with an interest in purchasing land similar to that owned by the consumer; that the telemarketer is qualified to sell real estate; and that consumers who call a specified number can "sell for cash today." Consumers who call pay several hundred dollars, but in most instances, the FTC alleges, MRG's client-telemarketers never sell the consumer's property. In addition, they allegedly are not qualified under state law to conduct real estate transactions, nor have they been contacted by anyone with an interest in buying land like that owned by the consumer.
The FTC also charges that the defendants' guaranteed award solicitations falsely represent that the consumer is "absolutely guaranteed" to receive one of several valuable awards, such as a car, a vacation, or a cashier's check for several thousand dollars, and that the consumer will receive the award without obligation to pay any money. In fact, according to the FTC complaint, when consumers call the telemarketer to claim their "awards," they find that they must send several hundred dollars to purchase a product or to cover shipping and handling costs in order to receive their award. Even when consumers send the money, the FTC charges that consumers often never receive the promised award.
Defendants' vacation solicitations allegedly promise consumers a vacation with no obligation to make a purchase or payment. In fact, consumers must send the telemarketer several hundred dollars to purchase a travel package and often must pay even more money to take their vacation, according to the FTC charges.
The FTC filed its complaint in the U.S. District Court for the Middle District of Florida, in Tampa, on Jan. 18. The Commission vote to file the complaint was 5-0.
NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.
The FTC has brochures for consumers titled "Sweepstakes Scams," "Prize Offers," "Telemarketing Travel Fraud," and "Land Sales Scams." Copies of these brochures, as well as copies of the complaint in this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(Civil Action No. 96-111-CIV-T-17A)
(FTC File No. 922 3003)