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FTC Wins Huge $7.5 Million Penalty Against "Do Not Call" List Violator

Posted by samzenpus on from the pay-up dept.

coondoggie writes "The Federal Trade Commission today said it has won a $7.5 million civil penalty – the largest ever — against Mortgage Investors Corporation, one of the nation's biggest refinancers of veterans' home loans for allegedly violating 'Do Not Call' requirements. According to the FTC’s complaint, Mortgage Investors Corporation called consumers on the Federal Trade Commission’s National Do Not Call Registry, failed to remove consumers from its company call list upon demand, and misstated the terms of available loan products during telemarketing calls."

35 of 136 comments (clear)

  1. Very nice by cbhacking · · Score: 4, Insightful

    Now, if they could just get those "This is an automated message from account services... Press one if you would like to lower your interest rates to as little as..." assholes, that would be great...

    --
    There's no place I could be, since I've found Serenity...
    1. Re:Very nice by garcia · · Score: 2

      Yesterday I got a scam call for a free resort stay if I was over the age of 28 and would provide them my credit card number.

      While this particular scam is nothing particularly new, what was surprising is that the call appeared to originate from my area code. When I called the number back it went to a woman's voicemail. I'm guessing the entire thing was spoofed and she's an unknowing accomplice to this scam. Hell, they could be choosing numbers entirely at random.

    2. Re:Very nice by Bill+Dimm · · Score: 3, Informative

      But they already got the Cardholder Services people. That's how ineffective the penalties really are.

    3. Re:Very nice by sribe · · Score: 2

      Now, if they could just get those "This is an automated message from account services... Press one if you would like to lower your interest rates to as little as..." assholes, that would be great...

      They did. A couple of months ago. The problem is the ROI is so high on this kind of scam that there's always another scumbag setting up all over again.

    4. Re:Very nice by Krojack · · Score: 2

      Spoofed or calls made through some open or hacked PBX such as Asterisk. I run a few Asterisk servers and use to get non-stop hammered with brute force attacks.

    5. Re:Very nice by smooth+wombat · · Score: 2

      I found an interesting way to get them to stop calling. I happened to be around when they called one time and so I followed the prompts.

      When I got a live person I started asking questions and finally the guy hung up on me. They didn't call back for months and when they did, I hit 1 to get a live person then put the phone down and walked away.

      Haven't gotten a call from them since.

      Don't know if my actions were specific in getting them to stop calling, but it can't hurt to try.

      --
      We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
    6. Re:Very nice by publiclurker · · Score: 2

      Too bad they always seem to call on my cellphone. I have a limited minutes plan, and don't really feel like wasting them on these slimeballs.

  2. Revenge, Not Fines by Freshly+Exhumed · · Score: 3, Funny

    It would be a lot more satisfying to have their PBX system(s) crash repeatedly, preferably during their own dinnertime.

    --
    I deny that I have not avoided attaining the opposite of that which I do not want.
    1. Re:Revenge, Not Fines by Applekid · · Score: 4, Funny

      I shouted "DROP TABLE" a few times into the phone but I don't know if it worked.

      --
      More Twoson than Cupertino
  3. I guess it was worth it then... by An+dochasac · · Score: 5, Insightful

    Surely Mortgage Investors Corporation pulled in far more than $7.5 Million with this fraud. And they certainly caused more than $7.5 Million in damages to their victims and the rest society by blowing phone spam into the property bubble. What's to stop them or anyone else from doing it again? This should have been a criminal case. Prison for the CEO and board of directors would be more of a deterrent for corporate crimes.

    1. Re:I guess it was worth it then... by TheGratefulNet · · Score: 5, Insightful

      they should have been fined 101% of their total gross income, since the start of the company.

      don't take SOME of their money. take ALL of it.

      if you don't, they still (the generic 'they') will see a profit from their bad behavior.

      --

      --
      "It is now safe to switch off your computer."
    2. Re:I guess it was worth it then... by cbhacking · · Score: 4, Informative

      That works, but I agree that violating DNC should carry very heavy pernalties. If I put my number out there specificlaly to say "don't call me", then I damn well don't want to be called.

      --
      There's no place I could be, since I've found Serenity...
    3. Re:I guess it was worth it then... by dkf · · Score: 5, Insightful

      That works, but I agree that violating DNC should carry very heavy pernalties. If I put my number out there specificlaly to say "don't call me", then I damn well don't want to be called.

      Much as I dislike phone spammers, let's save the very heavy penalties for the fraud and misrepresentation. HOWEVER... They weren't just being annoying asses (not generally illegal, alas) and violating an agreement they'd signed up to (clearly a civil penalty thing), they were also telling lies about the details of what they were selling (assuming TFS is accurate). That's the sort of thing that sounds like it ought to be investigated on a criminal basis.

      --
      "Little does he know, but there is no 'I' in 'Idiot'!"
    4. Re:I guess it was worth it then... by DrXym · · Score: 4, Funny

      Sew their mouth shut instead. "Tell me Mr Mortgage Investors Corporation director what good is a phone call if you are unable to speak?"

    5. Re:I guess it was worth it then... by Anonymous Coward · · Score: 5, Insightful

      We never want you to call, ever. You shitbags gamed the system by hiding 'please call me' boxes which were auto checked on a hidden iframe, or weaseled it into some tiny print on a statement, or some other shady business.

      I hope that you suffer some great harm. Yes, you, symbolset, I hope that you personally suffer some great harm or negative event in your life for being such a shitbag.

    6. Re:I guess it was worth it then... by geekmux · · Score: 2

      Surely Mortgage Investors Corporation pulled in far more than $7.5 Million with this fraud. And they certainly caused more than $7.5 Million in damages to their victims and the rest society by blowing phone spam into the property bubble. What's to stop them or anyone else from doing it again? This should have been a criminal case. Prison for the CEO and board of directors would be more of a deterrent for corporate crimes.

      Yes, I agree 100%, as does most of society. No fine these days should start with an "m" (as in million), which is a pathetic joke. We should be skipping right to what wakes executive criminals up, speaking in their language of "billions" and/or "minimum mandatory sentence".

      And I'm sure they'll get right on that shit...right after they get done prosecuting the "Too Big to Fail" executive team of 2008 that caused the global financial meltdown.

      Oh, and please stop holding your breath...you're turning a horrid shade of purple. It's not a good look.

    7. Re:I guess it was worth it then... by Le+Marteau · · Score: 5, Funny

      "I used to deal with guys like you every day and not only could you not remember that you gave me permission to call you - you asked me to. "

      Think about it. You spent your day... you made your living... virtually barging in on people who don't know you, who for the most part don't want to talk to you, and who get "all twitchy" because they can't remember if they ticked off an opt-out box or not.

      You were, in other words, a professional asshole.

      --
      Mod down people who tell people how to mod in their sigs
    8. Re:I guess it was worth it then... by wbr1 · · Score: 4, Insightful

      Here is the problem. We have many, many over-zealous prosecutors willing to swing an excessive charge sledgehammer at any Aaron Swarts that comes along. This is easy to do and holds little risk for them.

      However, when it comes to a corporation that has defrauded^H^H^H^H^HSTOLEN millions, who in the corporation is responsible? The CEO? An upper manager? A cabal of board members? In order to find out, the prosecutor has to do work, and run the gauntlet of that corporations legal department filing every stopping and blocking motion possible, making it less worth their time.

      --
      Silence is a state of mime.
    9. Re:I guess it was worth it then... by smartin · · Score: 2

      That works, but I agree that violating DNC should carry very heavy pernalties

      I would consider death to be the minimum penalty.

      --
      The difference between Canada and the USA is that in Canada healthcare is a right and gun ownership is a privilege.
    10. Re:I guess it was worth it then... by Anonymous Coward · · Score: 3, Informative

      I worked for Mortgage Investors in Atlanta Georgia. The whole selling thing is a scam. You go to people's houses that had listened to the telemarketer's spiel. The telemarketer tells them great things. The sales person/loan officer(me) goes to the home with a presentation booklet and is supposed to read word for word from the presentation booklet as you flip through the pages. Very few read word for word because it is a whole lot of BS to swallow and the sales person knows it.

      Then depending on the state, the Atlanta office handled both Georgia and Alabama, you did a 3 page worksheet showing how much money a month they would save by having this new loan. I'm a math major and the work sheet is math over load for me. The majority of the people I pitched the worksheet to just looked at me with their eyeballs just spinning when I was done. There was a reason for that.

      That was all done to hide the fact that they were probably saving less than $100 a month but paying someone 8% of their loan value to do that. I tried to sabotage a loan for a customer that they were only saving $3 a month over 30 years but almost costing them $14,000 to do it. But the sales pitch does work and it gets them to concentrate on the $3 savings a month.

      Many times through the worksheet presentation you mention the $3 monthly savings. It is also shown at the bottom of every worksheet page. I think for this guy I did the math on the cost of the loan which isn't in the worksheet and mentioned it a time or two before he signed the worksheet. I do believe the loan went through even though me trying to make it fail.

      Now there is upsides to the company about 5% of customers do actually save a bunch of money. I did save a customer $600 a month on a loan that lived in rural South Georgia. I brought his loan from 10.5% to 6.25%. He could have probably had 4% if he had gone with a company that wasn't so fixated on getting the maximum allowed by law out of the customer.

      On the odd case where the customer is saving too much money, the sales person/loan officer has the discretion to pitch a 15 year loan instead and even make more money off the loan.

      Sales person/loan officer gets paid on average 0.5% of the loan value. Each sales person/loan officer got 3 homes to pitch to every day. 1 Million in loan values closed every 2 weeks got you a $5,000 paycheck at the end of those 2 weeks. I left after a year and a half of working there just as the housing bubble was bursting. There were several pay periods where I did do the 1 Million. Most pay periods averaged $200,000 to $300,000 though. Greed has a way of keeping your mouth shut.

    11. Re:I guess it was worth it then... by mlts · · Score: 4, Interesting

      The problem is that the scumbuckets doing the calls have a lot of ways to easily thumb their nose at the FCC:

      1: They use shell companies incorporated offshore. The FCC gets a big verdict, the company goes under, but the next day, another company is doing the same exact thing. All their equipment and workers are held and employed by secondary holding corporations (the details are all kept offshore), so the only thing lost might be a name.

      2: With VoIP, it is trivial to forge numbers on Caller ID and run the shop from offshore.

      3: There are so many DNC loopholes. Business "A" can rent out their mailing list, so business "B" can robocall at will, saying that due to the mailing list, they have a business relationship with the victim^Wcallee.

      It is a very lucrative business because there is no real way for someone to block it and still have a usable phone. On landlines, there is no way to shut it off, as call blocking doesn't work on 800/888/866 numbers. iOS, one can use DND mode and only allow contacts (but it doesn't stop them from filling the voicemail up.) Android has Mr. Number which is a decent app, and uses a database of spammers/robocallers to deny calls with a busy signal.

  4. for allegedly violating by Anonymous Coward · · Score: 3, Informative

    Pro-tip: You can stop saying "for allegedly violating" and start saying "for violating" when the guilty verdict is handed down.

  5. Huge penalty? by ldobehardcore · · Score: 2

    $7.5 million isn't huge. It's nothing. Compared to the value of the average multinational corporation (eg Proctor and Gamble, Ford, GM, General Electric, the list goes on), it wouldn't amount to a single day's worth of revenue. Take them for every dime, and then another ten times that amount so the executives will have to sleep in the gutters, and be spat upon by us commoners.

    --
    Hectice, baby, Mercator says hello to you
    1. Re:Huge penalty? by Tom · · Score: 2

      You've not worked in a corporation, have you?

      When the going gets tough, the CEO will be the last to feel it. Lots of regular employees, many working in parts of the corporation having nothing to do with the fraudulent action, will feel it first.

      If you want to hit the C-Level, you need to make a criminal case and accuse them directly.

      --
      Assorted stuff I do sometimes: Lemuria.org
    2. Re:Huge penalty? by Rockoon · · Score: 3, Interesting

      Thats not exactly true. In lots of cases when the going gets tough the CEO is replaced with another that has a proven track record of digging companies out of the particular tough spot the company finds itself in (at least if the owners/board members know whats good for them.)

      For instance, the largest casino in the United States (Foxwoods) ended up with a serious credit problem several years ago. The presiding CEO (Michael Speller) was forced to resign, giving up his golden parachute, and then they brought back in a former CEO (Bill Sherlock) that had left on very good terms (the employees loved him, and the casino grew to be the biggest in the country under his watch) to serve as a temporary intrim until they landed the current CEO (Scott Butera) who is a specialist in digging corporations out of credit problems (his previous position was saving the Tropicana in Atlantic City from its own credit problems.)

      Note also that Scott Butera is also renowned as a union-friendly CEO, whereas Speller the CEO they forced out had brought moral down so low that the employees unionized under the mismanagement. So the owners saw the problem and picked up the perfect guy for the situation that they found themselves in, a new CEO that fairly quickly made peace with the union and then fairly quickly got the approximately $2 billion in debt restructured so that the casino could at least make the interest payments rather than continue to default on the loans.

      Today the casino has breathing room again, seeking to establish a new property in Massachusetts.

      --
      "His name was James Damore."
  6. Why "allegedly"? by nukenerd · · Score: 2

    The FTC having won the case, legally it is now fact surely?

    1. Re:Why "allegedly"? by Main+Gauche · · Score: 5, Insightful

      It was a settlement. No guilt was ever established. This may also explain the low dollar figure everyone else is talking about.

    2. Re:Why "allegedly"? by dkleinsc · · Score: 4, Insightful

      This is a continual pattern by the US federal agencies though: When some company is caught with their hand in the cookie jar, they're routinely settling the case for a relatively small fine that just looks like a really big number but is peanuts compared to the profits from the crime. They should, of course, be nailing the company and its officers to the wall.

      And this phenomenon isn't a Democratic thing or a Republican thing - the Bush, Clinton, Bush and Obama administrations all have been routinely doing this.

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
  7. Do Not Call - ANYONE by Dins · · Score: 4, Insightful

    It's great to see this and all, but it would be nice if there was an easier way to catch these companies. Most block caller ID, and if they are doing it illegally they're not going to give you their contact info if they sense you are trying to bust them.

    The thing that pisses me off about the do not call list, is the fucking politicians have conveniently exempted political calls. When I say do not call me, I mean everyone - no charities, no politicians - EVERYONE. It gets nuts in the month preceding an election.

  8. Wow, what a steal! by pla · · Score: 2

    7.5 million over the 10 years the DNC has existed? Chump change compared to the profits.

    Hell, it surprises me someone hasn't set up a company specifically using the DNC list as their "good leads" list, and budget for paltry fines like this as just part of the cost of doing business.

    Even in this case, it sounds like the "lying through our teeth scamming veterans" had much more to do with the size of the fine than any actual impact on we mere humans who have time and again told companies to fuck right off.

    Dear FTC: We want you to quit playing games and start jailing executives for such blatant violations. We want you to whack the casual, somewhat-repentant (to whatever extent you can call a sociopathic-by-design entity "repentant") offenders with the "only" 7.5M stick. Get the hint?

  9. Re:Final Notice? by YoungHack · · Score: 2

    I ignored them for a long time. Now I press 1 every time, and start asking questions as if I'm interested but don't have a clue how this can work and who they are. One of of the reps said, "Gee what an idiot," before finally hanging up on me.

    I'm not sure, but the pace of their calls seems to have slowed now that they know I'm just going to tie them up and cost them money.

  10. Unwanted phone calls by EmperorOfCanada · · Score: 3, Interesting

    I have a simple idea for a pretty solid system to deal with all unwanted calls. The idea is that you opt into this system. Then when you receive a call that you don't want you would dial *55 or something. You would never receive a call from that number again but more importantly once some small number of people had *55'd a number nobody who had opted in would receive a call from that number.

    This way anybody who makes annoying phone calls would be blacklisted. This would include politicians, survey companies, charities, sales people, even annoying girlfriends. I would trust that anyone who annoys even a small handful of people is someone I don't want phoning me. Charities, politicians, and whatnot would be all indignant about this but if they regularly got *55'd then maybe they should rethink their position in this world.

    The key here is no exceptions. I don't want some group self righteously explaining why they should be able to annoy me. Basically I don't want to ever receive a phone call from someone who I don't personally know.

  11. Almost... by poofmeisterp · · Score: 2

    ...and misstated the terms of available loan products during telemarketing calls.

    And now we know what the suit really brought in the big bucks for.

    This isn't about DNC; it's about presenting misleading information.

    I'm waiting for the day that some company really gets busted and taken out of business on DNC violations alone!

  12. Re:Put PRISM to use by flatcat · · Score: 2

    Best PR the govt. can get would be to use PRISM to locate these "account services" bastards and Guantanamo Bay their ass.

  13. Re:Do Not Call or how to get insulted by Khashishi · · Score: 2

    And that's why your parents stopped calling you.