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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.
Whatever happened to punitive damages? This seems like the opposite.
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?
"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
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.
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?...
The other 122 million was spent on the lawyers to get it knocked down to 50 million.
yeah I don't understand how the US legal system works but it looks like if an individual commits fraud, he is a criminal but an individual commiting it in the name of a company can get away with it because the company pays a 50 million settlement. Who gets that money? the state? Cause this awfully look like a bribe. these people should go to jail.