Nevada Telemarketer Agrees To Settle FTC Charges of Running Bogus "Recovery Room"

Keith Parker, president of Desert Financial Group (DFG), a Las Vegas company, has agreed to settle Federal Trade Commission charges that they falsely told consumers -- most of them senior citizens -- that for an up-front fee, sometimes exceeding $1,000, they could recover all or almost all of the money that they had lost to other telemarketing companies. In fact, according to the FTC, in most or all instances, consumers recovered little, if any, money from the defendants' efforts. Parker and DFG are defendants in a case that was part of a December 1995 nationwide, multi-agency telemarketing sweep called "Senior Sentinel."

Under the proposed settlement to these charges, Parker must first post a bond in the amount of $300,000 before engaging in any telemarketing activities in the future. He also has agreed to pay $11,000 for consumer redress.

The proposed settlement to the FTC’s charges would prohibit Parker from misrepresenting:

• that a consumer will recover some, most, or all of the money previously lost to telemarketers;
• their success in recovering lost money;
• that prizes never delivered to a consumer will be or have been, recovered; and
• any fact material to a consumer’s decision to purchase recovery room services.

In addition, Parker would be prohibited -- in connection with engaging in, or assisting others engaged in telemarketing -- from misrepresenting any fact material to a consumer’s decision to make a charitable contribution, enter a contest for a prize, or purchase any product or service, including recovery room services.

The FTC said it will seek a default judgement against DFG once the proposed settlement with Parker is approved by the court.

The FTC filed the proposed settlement in the U.S. District Court for the District of Nevada, in Las Vegas, on April 8. The settlement requires the court’s approval to become binding. The Commission vote approving the settlement for filing was 5-0.

This case was jointly handled by the FTC’s Division of Service Industry Practices and the FTC’s San Francisco Regional Office.

NOTE: The Stipulated Final Order for Permanent Injunction is for settlement purposes only and does not constitute an admission by the defendant of a law violation. The settlement has the force of law when signed by the judge.

Copies of the proposed settlement, as well as other documents associated with 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 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

(FTC File No. 965 3452)

(Civil Action No. CV-S-95- 01173-LDG)