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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.
At least no one is talking "Bail-out".
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
Negative options is a situation where unless you elect or explicity tell the company not to charge you for or enroll you in their services, they take it as a "yes" and continue to bill the costs. The sneaky bit here is that people were enrolled in "free-tial" programs and then tricked into revealing their back account information. When they failed to explicitly say no at the end of the free-trial period, *bam* the scammers started billing.
To:FTC
On:Case XXXX-XXXXX
In order to proceed with the financial restitution banking information is required.
Whatever happened to punitive damages? This seems like the opposite.
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
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.
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
The court's orders include a $171.9 million suspended judgment against defendants FTN Promotions; Guardian Marketing Services; Strategia Marketing; Co-Compliance; Bay Pines Travel; Suntasia Properties; Bryon Wolf; and Roy Eliasson, provided the other restitution money is paid out. Suspended judgments also were entered against JPW Consultants, and JeffreyWolf for $60 million, and against Alfred H. Wolf for $115 million.
So it looks like, once it is shown the $50M is paid, the companies still have a $346.9M bill to pay.
Man... why didn't anyone from these companies call me? Looks like you get twice the amount of money back that you got scammed out of!
1. Get a call from someone offering nifty free thingiojiggas
2. Say 'FREE??? AWESOME! HERE'S MY DEBIT CARD NUMBER!!!
3. Wait for lawsuits and a judge to order the companies involved to pay it all back.
4. ????
5. PROFIT!!!
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.
Comment removed based on user account deletion
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.
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
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.