On February 16, the Department of Justice (DOJ) filed a complaint in the district court for the Southern District of California on behalf of the Federal Trade Commission (FTC) against seven corporate entities and five individuals acting as officers and/or owners of the corporate entities. The complaint alleges that the defendants, who represent a web of interconnected platform providers, lead generators, telemarketers, and debt relief service sellers, provided and implemented technology to initiate outbound robocalls to consumers to illegally telemarket various goods and services, including phony debt relief services in violation of the Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310 and the FTC Act, 15 U.S.C. § 45(a).

Specifically, the complaint alleges that the defendants: made misrepresentations regarding debt relief services; facilitated violations of the TSR by knowing, or consciously avoiding knowing that customers’ operations caused the initiation of telemarketing calls to numbers on the FTC’s Do Not Call Registry; initiated illegal pre-recorded telemarketing messages (robocalls); failed to make required oral disclosures; misrepresented material aspects of debt relief services; and charged or received fees from consumers before providing a debt relief service.

The DOJ also filed a proposed consent order against one of the companies, a debt relief lead generator, and the company’s owner. If approved, the consent order will require the defendants to: stop violating the TSR and to review the methods used by the company’s existing lead generators; review and determine whether any leads were sold or offered to them by means that do not comply with the consent order; and stop buying leads from any generator found to have sold the company such leads. Additionally, the consent order imposes a $3.38 million judgment against the defendants. However, all but $7,500 will be suspended based on inability to pay. The $7,500 will be paid to the FTC to use for consumer redress.

In the press release announcing the filing of the complaint and consent order, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection said that this case “targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially” and the FTC “will continue to take aggressive action to protect consumers from the scourge of illegal robocalls.”

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Photo of Christine Emello Christine Emello

Christine focuses her practice on consumer financial services matters, with an emphasis on disputes, litigation, investigations, and examinations. She has worked on both federal and state court cases in jurisdictions across the U.S. Christine drafts pleadings, including complaints, motions, and responses, and prepares…

Christine focuses her practice on consumer financial services matters, with an emphasis on disputes, litigation, investigations, and examinations. She has worked on both federal and state court cases in jurisdictions across the U.S. Christine drafts pleadings, including complaints, motions, and responses, and prepares witnesses for cases involving state and federal laws such as the Telephone Consumer Protection Act (TCPA), the Fair Credit Reporting Act (FCRA), and the Fair Debt Collection Practices Act (FDCPA). She has worked on cases for a variety of financial institutions, banks, and lenders, including a large multinational bank, a major national health care consulting firm, and a leading worldwide online payments platform.

Photo of Chris Willis Chris Willis

Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending…

Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending them in individual and class action lawsuits brought by consumers and enforcement actions brought by government agencies.