Markets Wired

At the Federal Trade Commission’s request, a federal court has approved a final order against Jasjit “Jay” Gotra, the founder and CEO of Alliance Security Inc. (Alliance), which the agency charged in 2018 with causing more than one million calls to numbers on the National Do Not Call (DNC) Registry. The complaint also alleged that Alliance performed illegal credit inquiries on unsuspecting potential customers.

The order announced today resolves the FTC’s litigation in this case. It bans Gotra from nearly all outbound telemarketing, prohibits him from violating the Fair Credit Reporting Act (FCRA), and bars him from misrepresenting his affiliation or association with any other business. It also imposes a $9.85 million civil penalty, of which Gotra will pay $88,000, based on his limited financial resources.

“Illegal telemarketing calls aren’t the way to sell home alarm services or anything else,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “We fight against unwanted calls on many fronts, and we’re in it for the long haul.” 

According to the FTC’s complaint, Gotra and Alliance are repeat violators of the Telemarketing Sales Rule (TSR), which prohibits calls to numbers on the DNC Registry. Alliance installed home security systems, and its employees allegedly made illegal outbound calls to solicit sales. Gotra and Alliance (then known as Versatile Marketing Solutions, Inc.), previously settled similar FTC allegations in a 2014 court order.

The 2018 complaint alleged Gotra and Alliance never complied with the 2014 court order. Instead, Alliance and Gotra violated the TSR again by making illegal calls and by contracting with third-party telemarketers that also made illegal calls to market Alliance’s services.

The complaint also alleges that Alliance and Gotra obtained consumers’ credit reports and credit scores without consumers’ knowledge or permission, and without having a permissible purpose, in violation of the FCRA. Alliance’s improper credit inquiries were so widespread, the complaint alleges, the company even tried to obtain credit reports of Presidents Trump and Obama.

The Commission vote approving the proposed final order was 5-0. It was filed in the U.S. District Court for the District of Rhode Island and has been signed by the judge.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.