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Scammers Who Bilked Senior Citizens Banned from
Telemarketing by FTC
Aug. 2, 2005 - Canadian telemarketers who duped
senior citizens into revealing their bank account information and
debited hundreds of dollars from their accounts have been permanently
banned from engaging in telemarketing in the future under a settlement
with the Federal Trade Commission. The settlement also bars the
operators from using or selling the personal or financial information
they have about U.S. consumers.
In November 2004, the FTC charged three Ontario,
Canada-based companies and their principals with violating federal laws
by masquerading as Social Security or Medicare representatives, and
claiming that, due to a Social Security Administration computer failure,
the consumers’ personal information had been erased from the system.
The defendants told consumers that they had to
provide their bank account and routing information to remedy the
problem.
Consumers who were reluctant to comply were told
they risked losing their Social Security payments. The FTC also charged
that the defendants told consumers they would enroll them in a new
Medicare insurance program that would give them discounts on medication
purchases and eyeglasses.
According to the FTC, the defendants debited
consumers’ accounts $299 each for their “enrollment” but the consumers
received nothing in return.
The FTC charged that the defendants violated the
Telemarketing Sales Rule and provisions of the Gramm-Leach-Bliley Act
that bar people from making false or fraudulent statements to obtain
financial information about another person. U.S. District Court Judge
James B. Zagel ordered a halt to the illegal practices and froze the
defendants’ assets, pending trial. The settlement announced today ends
that litigation.
The settlement permanently bans Xtel Marketing,
Navin Baboolal, and Annilla Ramkissoon, doing business as Millenium
Consulting and Med Supply, from telemarketing or assisting others to
telemarket. It also contains reporting and record-keeping provisions to
allow the FTC to monitor the defendants’ compliance with the order and a
$623,000 suspended judgment that would become due if the court
determines that the defendants misrepresented their financial situation.
Under the settlement, accounts with companies that processed the
defendants’ debits will be turned over to the FTC for consumer redress.
The FTC brought this matter with assistance of the
members of the Toronto Strategic Partnership, a cross-border fraud law
enforcement effort that includes, in addition to the FTC: Competition
Bureau Canada, the Ontario Provincial Police Anti-Rackets, the Toronto
Police Service Fraud Squad, the Ontario Ministry of Consumer and
Business Services, and the United States Postal Inspection Service. The
Toronto Police Service executed search and arrest warrants and charged
the defendants with fraud. The FTC also received significant assistance
from the Social Security Administration’s Office of the Inspector
General.
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