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The Federal Trade Commission announced last week a crackdown on robocallers, giving one of the clearest pictures yet of the people and organizations behind the avalanche of nuisance phone calls to consumers.
The actions are important because they draw the connection between robocalls, which may seem like mere annoyances, to the fraudulent organizations or illegal mass-calling schemes behind them.
"We have a strong robocalling enforcement program, which is meant to protect wider consumers from abuse and abusive calls," said Ian Barlow, program coordinator for the FTC's Do Not Call program.
The most recent FTC action drilled down into organizations that tried to push fake products or multilevel marketing schemes, and those that sold real products but marketed them in illegal ways.
Here's what they found out.
In some cases, robocalls proliferate through programs that resemble multilevel marketing schemes, where business founders push robocall packages on "members" to spur quick growth.
In one case, an organization known alternately as "8 Figure Dream Lifestyle," "Millionaire Mind" and "Online Entrepreneur Academy" enticed consumers to buy memberships to gain access to a "franchise-like opportunity" to sell the organization's "proven business model" or "blueprint for success" downstream. Members paid between $2,395 and $22,495 to join, and the business claimed they could earn $5,000 to $10,000 in the first two weeks, followed by similarly large sums.
In one case, a founder of the organization bragged of making $6.5 million off the "blueprint," though it's unclear how much founders were able to profit. Attorneys for the defendants declined to comment.
In addition to the robocall training and operational help the companies allegedly provided members, they also provided the email, texting and social media marketing packages.
In another robocalling case, a company called Redwood Scientific sold dissolving oral film strips that were billed to treat everything from smoking to obesity to sexual performance. The calls attempted to auto-enroll victims into subscription plans for the strips. That case was settled, with one defendant agreeing to no longer make deceptive health claims, among other provisions. The defendants neither admitted nor denied the allegations in the complaint as part of the agreement.
The FTC also looked at an organization called Life Management Services, which allegedly netted $15.6 million from consumers who thought they were reorganizing their credit card debt through an interest rate reduction service. This organization originated tens of millions of calls claiming they were from a generic department like "bank card services" or a "credit assistance program." In others, the group said they represented a "licensed enrollment center" for companies such as Visa or Mastercard.
Consumers who stayed on the line were told they needed to make up-front payments of between $500 and $5,000 to pay off credit card bills, or even larger sums to enroll in a debt relief program. "In reality, the defendants sometimes made a rudimentary attempt to contact the consumer's credit card company, but consumers report that defendants were almost never able to obtain the promised rates or savings," the FTC said.
The defendants could not be reached for comment. In 2018, the FTC and the State of Florida won a summary judgment in the case ordering the group's leader to pay $23 million.
Another complaint, against a corporation called First Choice Horizon, outlines how the robocaller "under the guise of confirming consumers' identities" for an offer of "bogus credit card interest rate reduction services," further "tricked them into providing their personal financial information, including their social security and credit card numbers," according to the FTC. The defendants' attorneys did not return calls requesting comment.
Another organization, called Media Mix 365, which generated "leads" for home solar energy companies, called a single number 1,000 times in a year and placed millions of nuisance calls to others, the FTC says. The company could not be reached for comment.
A company called Lifewatch was a prolific spoofer, the FTC said, sending calls to consumers' phones that looked like they may have been coming from familiar numbers or numbers within the same area code.
The group sold a "free" medical alert system and fraudulently claimed the system was endorsed by the American Heart Association or AARP. On the calls, people were told that they wouldn't be charged for the product unless it was "activated," but their credit cards were charged immediately, the FTC said. The company did not respond to requests for comment.
In another action, a single defendant — Derek Bartoli — allegedly developed a popular telemarketing "autodialer" tool that was used to send hundreds of millions of robocalls. Bartoli sent 57 million calls to registered phone numbers in a six-month period of 2017 alone, the complaint says. He is now subject to a proposed court order permanently banning him from calling numbers on the Do Not Call registry. Attempts to reach Bartoli were unsuccessful.
For cases involving fraud allegations, such as the 8 Figure Dream Lifestyle case, the FTC is able to freeze defendants' assets and work to attempt to get money back for victims. In others, where consumers may have been receiving real products but spammers were violating robocalling rules, the FTC usually seeks to simply fine the organization in question, Barlow said.
For consumers wondering what they can do about the calls, the first rule is always, "hang up, do not engage. If you see an unknown caller ID, don't answer." Consumers can report robocalls or violations of the Do Not Call registry to the FTC on its website.
Major tech hardware companies including Apple and Google, as well as wireless carriers such as AT&T, Sprint, Verizon and T-Mobile, have begun offering products, services and applications to help cut down on the number of robocalls consumers receive, another avenue Barlow recommends.