Slashdot Mirror
Telephone Scammers Ordered To Pay $50M
coondoggie writes "The Federal Trade Commission said a group of telephone scammers will pay out nearly $50 million to settle charges they deceived over a million people in a bank information fraud scheme. As is unfortunately the situation in many of these case, the $50 million restitution, while substantial, is dwarfed by the almost $172 million the FTC says Suntasia Marketing bilked out of its victims." The company used "negative option" programs, including memberships in discount buyer's and travel clubs, to keep dinging victims' bank accounts. The FTC said the eight interrelated companies running the scam employed more than 1,000 people.
Hanging's too good for them!
At least no one is talking "Bail-out".
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
Anyone shed some light on this?
I'm guessing its some way of getting people to agree without them knowing they have, or being unable to not agree. Double negitives etc? Or Opt-out system - Unless you tick this box and return it in 2 seconds then you agree to pay us?
Someone help :|
- http://www.milkme.co.uk
So maybe they too can ask for a bailout of say...$50,000,000, perhaps?
Sig Follows: "Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." -- Mark Twain
FTFA: "According to the FTC, between 1999 and July 2007, Suntasia deceptively marketed a series of negative option programs"
Whadda ya mean between 1999 and 2007? Are you telling me that they've been running their scam for eight years without anyone doing anything about it?
The summary questions why they're being fined for less than the $172M taken from customers...
Well the answer is very simple: Tax and costs. Even running a somewhat illegal operation has running costs particularly if they had 1,000 people on the payroll.
So the "take home" net might have been $50M which is where the fine was set. Otherwise you're fining them money that they've already paid in tax.
No, no, no. This is Slashdot, not some schlock news site like Digg! You've gotta form your jokes right. This is perfect for a "related news" joke. See? Like this:
"In related news, outgoing Treasury Secretary Henry Paulson has authorized a $50 million bailout for the eight members of the Discount Buyer's and Travel Clubs Trade Association today. Details at 11."
My blog
To:FTC
On:Case XXXX-XXXXX
In order to proceed with the financial restitution banking information is required.
Isn't there some sort of criminal justice recourse for the victims at some point here? It seems like there should be at least one hotshot DA willing to take up the case. Or am I missing something about their deceptive practices that somehow does not translate to criminal action?
ACK
Hmmm, 172 - 50 = $122 million profit. Doesn't sound like that $50 million fine will do too much deterring...
The NSA: The only part of the US government that actually listens.
So once again, people who ran a criminal organization can just give the government a part of their profits, in exchange for getting of Scott free?
This sounds like Amazon prime They offered me a free trial before Christmas and I just remembered when I read this. They would have charged me £47.97 if I hadn't cancelled by tomorrow!
"Hi, I've got this free trial, want it?"
"sure, what's the harm. You said free, right?"
"Yeah, completely free. Just give me your credit card number and agree to this payment authorization."
This is what MOST of the so-called "tricks" are: Just plain asking for the number and permission. It's how the so-often-complained-about AOL did it, it's how "Free Credit Report".com does it, it's likely how these guys were doing it.
If you're stupid enough to hand over PAYMENT DETAILS to use a service, and expect it to be free, your bank should not have issued you an account in the first place.
-- 'The' Lord and Master Bitman On High, Master Of All
...so now they can tackle the caller-id spoofers who phone me every day or two on my cell phone from another random number telling me that the "factory warranty on my vehicle is about to expire" and refuse to answer any questions about their company or how to get off of their list.
And yes, before you ask, my number is on the do-not-call list.
Big! Strong! Wow! Tada-O!
the $50 million restitution, while substantial, is dwarfed by the almost $172 million the FTC says Suntasia Marketing bilked out of its victims.
Either the the government is endorsing fraud or the laws are inadequate. Anytime a company profits from fraud, if the penalty is anything less than 100% plus all gains received off of the fraudulently obtained money, it is nothing short of an endorsement of such fraudulent activities.
If the laws are inadequate, why haven't they been changed unless this is an endorsement?
In this case, anything short of a $200M is no penalty at all - it's the cost of doing illegal business, which is still very, very, very profitable.
Great, so if I elect to make money by massive fraud, the only dissuasion from this is that I will get a sizable tax from the government on my activity.
a fine should wipe out the gain and then some, if it doesn't, it's essentially a tax.
Except with Amazon prime you can cancel immediately and still use the remainder of the trial period. I think they are completely reasonable in their offer.
how far is this economic collapse going to go? even the people who are scamming us are now losing tons of money...
Reminds me of when I signed up for a free magazine online. It was a reputable magazine so I wasn't worried about spam. Anyway, it said 'free' and as long as something says free and never asks for my Credit Card, I have no issues.
Anyway, after the first free edition, they sent several more. After 3 months they sent me a bill and said to pay up. Called them and said F.U. it wasn't me. Other than a name and address, they had nothing on me.
Don't you keep track of stuff like this? Why did you sign up in the first place? I have no simpathy for people who knowingly signup for a service then forget to cancel it. You knew 30 days in advance exactly when and how much you were going to get billed. If your prone to forgeting important information like this then don't sign up in the first place!
They should just ban negative option service contracts. There's too much incentive, even for legitimate companies, to structure them in a way that rips off their customers. I'm tired of being told that all I had to do to cancel was to send a passenger pigeon to Tierra del Fuego between the hours of 0300 and 0400, exactly 13 days before the contract is automatically renewed.
Mea navis aericumbens anguillis abundat
Ok, maybe I'm daft, but shouldn't the punishment fit the crime, or something like that? If the punishment for illegally making $172 million is only a $50 million fine, then one could just work that fine into the equation and still profit. Easily. By $122 million. Last time I checked, a $122 million profit (ok, let's say $121 million because I'm sure Suntasia had some overhead costs in their scam) is well worth the effort (I certainly wouldn't complain if someone (or lots of someones) gave me $121 million...). You'd think the obvious fine would be $222 million - the illegally-gotten $172 million PLUS $50 million in fines. Then again, what do I know?...
Comment removed based on user account deletion
victims get scammed, and the gov't gets paid...
Thanks to file sharing, I purchase more CDs
Thanks to the RIAA, I buy them used...
In cases like this they should be ordered to pay back DOUBLE what they made.
In the US items sent via mail like this are legally considered gifts. Attempts to charge for them after the fact can be prosecuted as mail fraud.
Virginia is for lovers. EVE is for griefers.
My bet is that the attorneys walk about with about $20M for their "expenses" and the remaining money (if they actually collect it from these turds) will be put into an organization to help prevent these things from happening. I lost $800 this year from a company doing debt consolidation. They started to mis payments to my creditors and then disappeared after two year. Thousands of us lost money, and I don't expect to ever get a dime back.
jsut athnoer menagiensls ltitle psrhae for you to dcoede. Why do we wtsae our tmie dnoig tihs?
I think that my wife was tricked into this one. I'm not sure if it is the same company, but here is what happened to her:
1. Bought Tickets on TicketMaster.com (paid 50% in "fees" - bastards)
2. After she finished paying she was sent to a site where they offered a "free trial" for some kind of discount service. Being that it came after the checkout she just closed the web browser.
3. Company starts billing the card she paid TicketMaster with several months later.
4. We notice the change and have it charged back.
5. They claim we signed up by _NOT_ explicitly doing anything on that page after the checkout. We should have unchecked the "sign me up" and then submitted the form to not sign up.
6. We and our bank disagree and charge them back anyway.
The real kicker is that they never even tried to deliver the login details to their "discount" website to her. I never thought that I could have a lower opinon of TicketMaster, but that did it. Bunch of rat sucking, baby raping, bastards.
[End of diatribe. We now return you to your regularly scheduled programming...] - Larry Wall in Configure from the perl
I had a free trial of Amazon Prime and after they charged me for the first non-free year (because I'd forgotten about it) but before I attempted to use the service, I canceled, and they refunded the fee before I even asked. They're not scammers.
The salesman's excuse for collecting payment information has some validity. In other words the company is willing to provide something for free as long as there is some chance of selling you more in the future. Since over the phone purchases are normally made with a charge card there is no hope of eventually making a sale if you don't even own a charge card and therefore the expense of giving you a free sample can not be justified.
Perhaps the law needs to define the word free and punish companies that misuse the word. Every day the TV and newspapers have ads that shout out buy one and get one free. Obviously the one given free is not actually free because it requires money to be spent. In America fraud is the norm.
I hope they don't do that to me. I receive Time, Business Week, National Geographic, and Entertainment Weekly for a year-long subscription. In exchange I had to pay $2 per magazine to cover postage costs, which I thought was still a good deal. I hope they don't do something dishonest and bill me at the end of 2009.
BTW I just did the math:
- Each consumer gets a $200 refund check from the FTC and Wachovia.
- That hardly makes-up for the losses incurred.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
No, most likely the magazine deal is they suck you in for the first year @ $2 per mag, and presumably in the future you will re-up the subscription at some "full" rate, which is less than news-stand prices, because you see how cool the mags are. You are probably OK in this case, but there is no such thing as a free lunch, period.
Who are you? The new #2 Who is #1? You are #617565. I am not a number, I am a free man! Muhahaha.
If it's the same group I got mine from (the one the folks at Best Buy offer to sign you up with) you can expect to be charged at the full subscriber rate for the next year. If you want to keep receiving the magazines, I suggest refusing renewal and going directly with the magazine's regular fulfillment house, who will still offer a fairly substantial discount for a year's subscription.
I was receiving Entertainment Weekly and was sent a bill for renewal for some ninety-plus dollars. EW will only charge you $15-20, depending on promotions and payment method.
Here's the one I got messed up in.
The bride tells me we need new curtains for the living room. We surf, and shop, and surf, and shop and end up at JCPenny. I use my debit card and the bride got new curtains.
JCPenny turns around my info to a subsidiary called Stonebridge, and I get spammed for insurance, and other stuff. Other stuff like a bullshit 'membership' which somehow I failed to opt-out of that charges my card $10/mo. Well, 3 months later I finally get that charge removed, with large amounts of swearing on the phone (hey, if 2 months of 'nice' phone calls won't work, break out the profanity).
I still recieve Stonebridge insurance scams in my snail-mail, after months and months of calling them and asking (yep ... more swearing too, although unsuccessful so far).
Never do business with JCPenny as they appear to have other instances, and multiple ways to rip you off.
My wife opted to get Entertainment Weekly as a promotion from a Best Buy purchase. It was to be 6 months.
She continued to receive it for 3 or 4 years with no bills and she never got charged or even gave payment information. Because the parent company is the same as for Time Magazine, when she changed her mailing address with Time, EW was also updated.
Finally, we got a bill for EW for renewal for 1 year. I told them the situation and they said ignore the bill. We don't get EW anymore, but it was interesting how they kept sending it for years without even asking for payment.
Sounds a lot like the Free[$ItemName].com or Crazy[$AnimalName].com scams. Sure you get the free item, but what they hide in the 1-point high print on the contract is that they get to charge your credit or bank account $20 a month for services rendered. And what's this service they're rendering? Apparently they think that charging $20 for nothing to be a useful service.
If somebody's offering something for "free" and it involves any credit card, debit, or bank account info, *DO NOT* participate. They're scammy, and like ticks and other parasites, they're not always easy to get rid of once they leach on.
My mom wanted some of those "get X coins for $CHEAP_PRICE" in the newspaper ads". We get charged more than the initial amount.
After a few months worth of charges (which included a couple overdraft fees), I gave up on calling the company and talked with my bank. I didn't get the charges back (no wonder), but I got every extra red cent back beyond the initial $25.
I really wish debit cards had chargeback protection like credit cards did... I'm a freelance worker so it's difficult for me to get credit due to being self-employed and having an unstable income ($400 one week, $0 the next).
Random Thoughts From A Diseased Mind (Not For Dummies)
- Each consumer gets a $200 refund check from the FTC and Wachovia.
Wachovia still has money to give out?!?
Same thing happened to me, except that when I wanted to get out of the program I had some internet problems and never got to do it. Forgot about it for a bit more than a month, then I saw the charge on my credit card.
Turns out that if you cancel, even after the trial has run out and your card has been charged, they will refund you up to a year if you haven't used the service.
So, Wachovia (which has recently shown it's inability to do anything correctly), says to send the checks, it will cost nearly 3x the value of the checks to be sent? Hello? McFly?
Wachovia, as the "scammer's payment processor", will have already received monies for processing payments for them (and probably charge back charges too). They can go cry a river somewhere else, they, like many people in the Bernie Madoff scheme, unlawfully earned income in this deal (that income should also be paid back to victims), and have no right to more money from anyone.
That is the way of life for a payment processor. Make big bucks skimming on the sales of others, risk being the company falls from grace like Humpty Dumpty did from the wall.
Sounds like WLI*ReservationRewards. I know they have a new company name now...same scam. I saw their stuff on the back end of a purchase from buy.com the other day. Blogged about it a couple years ago, and had literally hundreds of people state the same thing happened to them. And you literally have to ready very carefully and select the right option to get your order confirmation without "joining" their scam.