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FTC Action Temporarily Halts Operation that Allegedly Used Fake News Sites to Make Deceptive Claims about Acai Berry Weight-Loss Products

As part of its ongoing crackdown on deceptive health claims, the Federal Trade Commission has filed a complaint jointly with the State of Connecticut, seeking to permanently stop a Connecticut-based operation that allegedly used fake news websites to promote their products, made deceptive weight-loss claims, and told consumers they could receive free trials of acai berry and “colon cleanse” products, and only have to pay the nominal cost of shipping and handling. The FTC alleges that many consumers ended up paying $79.99 for the trial, and for recurring monthly shipments of products that were hard to cancel. The defendants have allegedly taken in more than $25 million from consumers in the United States.

The parties have agreed to a court order temporarily halting the illegal conduct of Boris Mizhen, LeanSpa LLC, and two other companies Mizhen controls; continuing an asset freeze; appointing a temporary receiver; and giving the receiver, the FTC, and the State of Connecticut immediate access to the business premises.

The complaint alleges that the defendants hired affiliate marketers who used fake news websites to promote the defendants’ products. The fake news websites used domain names that appear to be objective news or health sites, such as channel8health.com, dailyhealth6.com, and online6health.com. The sites included stories such as “Acai Berry Diet Exposed: Miracle Diet or Scam?” and “1 Trick of a Tiny Belly: Reporter Loses Her ‘Belly’ Using 1 Easy Tip,” and often displayed the logos of major news sources, such as CNN, MSNBC, and Fox News. Fake reporters on the sites claimed to have tried the defendants’ weight-loss products, such as LeanSpa, NutraSlim, and SlimFuel, and to have lost a substantial amount of weight quickly – sometimes as much as 25 pounds in four weeks without any special diet or vigorous exercise regime. The fake news sites had links to the defendants’ own websites, where consumers were offered trial samples of two weight-loss dietary supplements: an acai-berry product and a colon cleanse product. The affiliate marketers earned a commission for each consumer who landed on their sites and signed up for a trial.

According to the complaint, once consumers landed at the defendants’ sites – including TryLeanSpa.com, TryNutraSlim.com, and TryQuickDetox.com – they were told that for a limited time only, in exchange for a nominal shipping and handling fee, typically $4.95 or less, they would receive trial samples of the acai berry or colon cleanse product, or both, and consumers were urged to provide their credit or debit card account information to pay the nominal fee to obtain a trial sample. If they tried to navigate away, a pop-up message sometimes appeared stating: “Don’t miss out on this GREAT OFFER!!! Just press Cancel to remain on this page and receive an instant discounted S&H price of $1.95.” The defendants allegedly would typically charge consumers either $79.99 for one of the products, or $158.98 for two.

The complaint alleged that the defendants used several entities known as “Independent Sales Organizations,” including Check21, LLC and Eureka Payments, LLC, to obtain merchant accounts at banks to process credit and debit sales transactions. Using these merchant accounts with several banks, including National Bank of California, WestAmerica Bank, HSBC Bank, and First Bank of Delaware, the defendants caused millions of dollars of unauthorized credit and debit card charges. The bulk of those unauthorized charges allegedly were processed through First Bank of Delaware.

The defendants’ allegedly deceptive practices also included charging some consumers $79.99 for products before the consumers even received the trial samples or before the 14-day trial period had ended; falsely promising a “100% Satisfaction Guarantee” and full refunds to customers who were dissatisfied with the product; misrepresenting that objective news reporters have performed independent tests on the products and independent consumers have endorsed the products; making unsupported claims that consumers could lose a significant amount of weight quickly; and falsely stating that the claims were clinically proven. The complaint alleges that the defendants’ business practices violated Sections 5 and 12 of the FTC Act, the Electronic Funds Transfer Act and Regulation E, and the Connecticut Unfair Trade Practices Act.

The stipulated court order halts the defendants from marketing or selling “negative-option” continuity plans, from making unauthorized charges while selling any good or service, and from making certain deceptive claims. The order also requires the defendants to cease collecting on customer accounts, and extends an asset freeze over the defendants until a final resolution of the court action.

This is the FTC’s 11th case involving fake news websites used to promote dietary supplements. In April 2011, the agency charged 10 companies that operated “fake news” sites promoting acai berry weight-loss products. For more information, see: THIS JUST IN: Fake News Sites Promote Bogus Weight Loss Benefits of Acai Berry Supplements.

At the request of the Federal Trade Commission and the State of Connecticut, the U.S. District Court for the District of Connecticut issued an ex parte temporary restraining order freezing the assets of the defendants on November 14, 2011. The court entered the Stipulated Preliminary Injunction Order on November 22, 2011. The Commission vote authorizing staff to file the complaint against Boris Mizhen, LeanSpa, LLC, NutraSlim, LLC, and NutraSlim U.K. Ltd. (also doing business as LeanSpa U.K. Ltd.) was 4-0.

The FTC would like to thank the United States Attorney’s Office for the District of Connecticut for its assistance and the Connecticut Better Business Bureau for its collaboration in this investigation.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No: 1123135)

FTC Issues The FY 2011 National Do Not Call Registry Data Book; Nearly 210 Million Phone Numbers on Do Not Call List

The Federal Trade Commission today issued the National Do Not Call Registry Data Book for Fiscal Year 2011. The FTC’s National Do Not Call Registry provides consumers with an easy way to stop unwanted telemarketing calls. In its third year of publication, the Data Book contains a wealth of information about the Registry for FY 2011, including:

The number of active registrations and consumer complaint figures since the Registry began in 2003;
FY 2011 complaint figures by month and complaint type;
FY 2011 registration and complaint figures for all 50 states and the District of Columbia by population;
The number of entities accessing the Registry by fiscal year; and
An appendix on registration and complaint data by consumer state and area code.

According to the Data Book, at the end of FY 2011 (September 30, 2011), the Do Not Call Registry contained 209,722,924 actively registered phone numbers, up from 201,542,535 at the end of FY 2010. In addition, the number of consumer complaints about unwanted telemarketing calls increased from 1,633,819 at the end of FY 2010 to 2,272,662 at the end of FY 2011.

This year’s Data Book also reveals trends in complaint data. In addition to providing information on the total number of consumer complaints per month, it also contains data on the number of monthly complaints specifically related to pre-recorded telemarketing “robocalls,” and requests for a telemarketer to stop calling.

While the number of consumer complaints about recorded messages used in telemarketing hit a low of 79,592 in April 2011, for example, the data show that the number of complaints about such calls have increased consistently since then, reaching 140,503 in September 2011. Most telemarketing robocalls have been illegal since September 2009. The FTC remains committed to stopping deceptive, misleading, and otherwise unlawful robocalls, and will take action against entities violating the agency’s Telemarketing Sales Rule.

Information for consumers about the Do Not Call Registry, company-specific do not call requests, and telemarketer Caller ID requirements can be found here and here on the FTC’s website, and consumers can sign up for the National Registry for free here.

FTC Warns Consumers About Scammers Claiming to be Calling From the Do Not Call Registry

The Federal Trade Commission wants consumers to know that scammers recently have been making phone calls claiming to represent the National Do Not Call Registry. The callers offer to provide an opportunity to sign up for the Registry. These calls are not coming from the Registry or the FTC, however, and consumers should not respond to them.

To add a number to the Registry for free at any time, consumers can call toll-free 1-888-382-1222 from the phone they wish to register, or go to www.donotcall.gov to sign up.

Facebook Settles FTC Charges That It Deceived Consumers By Failing To Keep Privacy Promises

The social networking service Facebook has agreed to settle Federal Trade Commission charges that it deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public. The proposed settlement requires Facebook to take several steps to make sure it lives up to its promises in the future, including giving consumers clear and prominent notice and obtaining consumers’ express consent before their information is shared beyond the privacy settings they have established.

The FTC’s eight-count complaint against Facebook is part of the agency’s ongoing effort to make sure companies live up to the privacy promises they make to American consumers. It charges that the claims that Facebook made were unfair and deceptive, and violated federal law.

“Facebook is obligated to keep the promises about privacy that it makes to its hundreds of millions of users,” said Jon Leibowitz, Chairman of the FTC. “Facebook’s innovation does not have to come at the expense of consumer privacy. The FTC action will ensure it will not.”

The FTC complaint lists a number of instances in which Facebook allegedly made promises that it did not keep:

In December 2009, Facebook changed its website so certain information that users may have designated as private – such as their Friends List – was made public. They didn’t warn users that this change was coming, or get their approval in advance.
Facebook represented that third-party apps that users’ installed would have access only to user information that they needed to operate. In fact, the apps could access nearly all of users’ personal data – data the apps didn’t need.
Facebook told users they could restrict sharing of data to limited audiences – for example with “Friends Only.” In fact, selecting “Friends Only” did not prevent their information from being shared with third-party applications their friends used.
Facebook had a “Verified Apps” program & claimed it certified the security of participating apps. It didn’t.
Facebook promised users that it would not share their personal information with advertisers. It did.
Facebook claimed that when users deactivated or deleted their accounts, their photos and videos would be inaccessible. But Facebook allowed access to the content, even after users had deactivated or deleted their accounts.
Facebook claimed that it complied with the U.S.- EU Safe Harbor Framework that governs data transfer between the U.S. and the European Union. It didn’t.

The proposed settlement bars Facebook from making any further deceptive privacy claims, requires that the company get consumers’ approval before it changes the way it shares their data, and requires that it obtain periodic assessments of its privacy practices by independent, third-party auditors for the next 20 years.

Specifically, under the proposed settlement, Facebook is:

barred from making misrepresentations about the privacy or security of consumers’ personal information;
required to obtain consumers’ affirmative express consent before enacting changes that override their privacy preferences;
required to prevent anyone from accessing a user’s material more than 30 days after the user has deleted his or her account;
required to establish and maintain a comprehensive privacy program designed to address privacy risks associated with the development and management of new and existing products and services, and to protect the privacy and confidentiality of consumers’ information; and
required, within 180 days, and every two years after that for the next 20 years, to obtain independent, third-party audits certifying that it has a privacy program in place that meets or exceeds the requirements of the FTC order, and to ensure that the privacy of consumers’ information is protected.

The proposed order also contains standard record-keeping provisions to allow the FTC to monitor compliance with its order.

Facebook’s privacy practices were the subject of complaints filed with the FTC by the Electronic Privacy Information Center and a coalition of consumer groups.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through December 30, 2011 after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments online or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the respondent has actually violated the law. A consent agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

FTC Seeks Second Round of Public Comments for Follow-up Study of Alcohol Industry’s Voluntary Guidelines for Reducing Advertising and Marketing to Underage Audiences

The Federal Trade Commission is seeking public comments on a proposal to require information from alcoholic beverage manufacturers for a follow-up study of the self-regulatory efforts of the alcoholic beverage industry. The information collected will be used in the FTC’s fourth major report on the effectiveness of voluntary industry guidelines for reducing advertising and marketing to underage audiences by beer, wine, and distilled spirits manufacturers.

The FTC has published a second notice in the Federal Register that describes proposed information requests to alcoholic beverage manufacturers. The notice is required to obtain approval from the Office of Management and Budget (OMB) to issue the proposed information requests. A summary of the proposed specifications is available on the FTC website.

The FTC seeks public comments on the notice. Comments, which must be received by Dec. 29, 2011, will be considered before the Commission submits a request for OMB review of the proposal under the Paperwork Reduction Act.

Interested parties can submit written comments electronically or in paper form by following the instructions in the Request for Comment part of the “Supplementary Information” section. Electronic comments can be submitted using a web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. (FTC File No. P114503; The staff contacts in the Bureau of Consumer Protection are Janet Evans, 202-326-2125, and Carolyn L. Hann, 202-326-2745.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC=s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC=s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(Alcholol study fr notice FYI)

Federal Trade Commission and Department of Justice Meet With Chinese Ministry of Commerce on Merger Enforcement Matters

Federal Trade Commission Chairman Jon Leibowitz and Acting Assistant Attorney General Sharis Pozen of the Department of Justice’s Antitrust Division today met with a delegation from China’s Ministry of Commerce (MOFCOM) to discuss antitrust merger enforcement. The delegation was led by China International Trade Representative and MOFCOM Vice Minister Gao Hucheng. MOFCOM is responsible for handling reviews of mergers and acquisitions under China’s Antimonopoly Law.

This is the first high-level MOFCOM visit to the U.S. antitrust agencies since the FTC and DOJ signed an antitrust Memorandum of Understanding (MOU) with China’s three antimonopoly agencies in July 2011 to promote communication and cooperation among the antitrust enforcement agencies in both countries.

The discussion topics in today’s meeting included recent antitrust enforcement and policy developments, the role of antitrust enforcement in times of economic downturn and cooperation among the three agencies on merger enforcement issues. The three agencies developed further guidance for cooperation on investigations when one of the U.S. antitrust agencies and MOFCOM are reviewing the same merger.

FTC and DOJ officials said that the discussions with the delegation from MOFCOM were productive and that they look forward to continuing their cooperative relationship.

FTC to Host Media Call-in to Field Questions About Privacy Settlement

WHAT: Telephone press conference for media members

Reporters who wish to participate can dial 1-800-288-9626 in the U.S., and 612-332-0107 for international calls.

The confirmation number is 226657 and the host is Bruce Jennings.

This call is for reporters only, and FTC staff will be taking questions only from only members of the media.

WHO: Jon Leibowitz, FTC Chairman

Jessica Rich, Deputy Director, Bureau of Consumer Protection

Maneesha Mithal, Associate Director, Division of Privacy and Identity Protection

Laura Berger, Staff Attorney, Division of Privacy and Identity Protection

FTC Sending Refunds to Victims of Debt Management Services Company That Violated Prior Court Order

This week the Federal Trade Commission is mailing refund checks to more than 2,900 consumers nationwide who were victims of a company that allegedly pitched worthless debt management services, and later was found in contempt for violating a court order barring its illegal activities. Consumers who were victims of the prohibited conduct will receive a total of $90,000 in refunds, with the average amount being $31.16.

The reimbursement stems from a February 2009 contempt finding against Florida attorney Randall L. Leshin,and his debt management services company, Express Consolidation, Inc. In its contempt ruling, the court found that the defendants violated a 2008 final order by continuing to do business in states where they were unqualified, and by collecting fees from consumers who had cancelled their debt management plans.

The 2008 order resulted from a case the FTC filed in 2007 against Leshin and his company. The complaint alleged that the defendants misrepresented their non-profit status, charged hidden fees, and misled consumers about the benefits of enrolling in a debt management plan. Under the 2008 order, the defendants were prohibited from the illegal conduct and from operating in states where they were not qualified to do business.

The checks, which are being mailed by a redress administrator, are valid for 60 days from the date they are issued, and the FTC urges consumers to cash them. Consumers with questions should contact the FTC’s redress administrator, Rust Consulting, Inc. at 1-866-458-3187, or visit www.FTC.gov/refunds. The FTC never requires the payment of money up front, or the provision of additional information, before consumers cash redress checks issued to them.

Information for consumers on how to avoid debt relief scams and manage their debt can be found on the FTC’s website.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(Civ. No. 0:06-CV-61851-WJZ)
(Express.Redress.final)

FTC Requires Three Internet Marketers to Stop Selling “Circle” Cosmetic Contact Lenses without Prescriptions as Part of Settlement

Three Internet marketers of cosmetic, “circle” contact lenses have agreed to resolve Federal Trade Commission charges by entering into settlements that will put a stop to their alleged illegal practice of selling lenses to consumers without prescriptions. Circle lenses are a type of decorative contact lens that covers not just the iris of the eye, as standard lenses do, but the white area as well. Wearing these lenses makes the eyes appear larger.

The settlements are part of the FTC’s ongoing efforts to help protect consumers from the health risks posed by improperly used contact lenses, through enforcement of the FTC’s Contact Lens Rule. The Rule requires sellers to verify that a consumer has a valid prescription for all contact lenses, including cosmetic lenses that do not correct vision. According to the Food and Drug Administration, the improper use of contact lenses, whether they are corrective or not, can cause corneal ulcers, corneal abrasions, vision impairment, and blindness.

The three settlements with Royal Tronics, Inc. and Jamil Hindi; Gene Kim; and Thy Xuan Ho bring the FTC’s total number of contact lens enforcement actions to 10 since the agency issued the Contact Lens Rule in 2004.

According to the FTC, Jamil Hindi sold prescription contacts and circle cosmetic contact lenses through his Florida-based company, Royal Tronics, Inc. on the website www.mycandyeyes.com. New York-based Gene Kim, sold circle contact lenses on his website buyexclusive.net; and Minnesota-based Thy Xuan Ho, also known as Brandon Lee, sold the lenses on the website mycutelens. The FTC charged that all of the defendants violated federal law by selling contact lenses without getting consumers’ contact lens prescriptions or verifying their prescriptions directly with the prescribers, and by failing to keep adequate records.

The settlement orders prohibit the defendants from selling contact lenses without obtaining a prescription from a consumer, or verifying prescriptions by communicating directly with a prescriber, from failing to maintain records of prescriptions and verifications, and from violating the Contact Lens Rule.

The settlement with Jamil Hindi and Royal imposes a $68,000 civil penalty, which will be suspended upon payment of $20,000. The other settlements impose civil penalties of $24,000 on Gene Kim and $5,400 on Thy Xuan Ho, both of which are suspended because of their inability to pay.

In each case, if it is later determined that the financial information the defendants provided the FTC was false, the full amount of their civil penalties will become due. The settlements also contain various record keeping provisions to assist the FTC in monitoring the defendants’ compliance.

The FTC’s guidance to sellers on their obligations under the Contact Lens Rule includes “The Contact Lens Rule: A Guide for Prescribers and Sellers,” and “Complying with the Contact Lens Rule.” Consumers can learn more about cosmetic contact lenses in “Avoiding an Eyesore: What to Know Before You Buy Cosmetic Contacts,” and about their rights under federal law in “The Eyes Have It – Get Your Prescription.”

The Commission votes to approve the proposed consent decrees were 5-0. The U.S. Department of Justice filed the proposed consent decrees on behalf of the Commission on November 22, 2011 in the U.S. District Court for the Southern District of Florida, (Royal Tronics, Inc., and Jamil Hindi doing business as MyCandyEyes), the U.S. District Court for the Eastern District of New York, (Gene Kim, doing business as BuyExclusive), and the U.S. District Court for the District of Minnesota (Thy Xuan Ho doing business as MyCuteLens.) The proposed consent decrees are subject to court approval.

NOTE: The Commission refers complaints to the DOJ for filing when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaints are not a finding or ruling that the defendants have actually violated the law. Consent decrees are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent decrees are subject to court approval and have the force of law when signed by the judge.

(Circle NR)
(FTC File No. 112-3044; Royal Tronics)
(FTC File No. 112-3043; Gene Kim)
(FTC File No. 112-3042; Thy Xuan Ho)

FTC Staff: Maine Dental Board’s Proposed Rules Could Undermine Pilot Project to Expand Access to Dental Care in Underserved Areas

Federal Trade Commission staff, in comments to the Maine Board of Dental Examiners, stated that dental hygienist rules proposed by the Board, designed to implement a pilot project to test expanded access to dental care in underserved areas of Maine, contain restrictions that could undermine the project’s purpose and deny consumers the benefits of competition among providers of dental health services.

The FTC staff comment states that the proposed rules “could have the unfortunate effect of harming the members of the public by limiting their choices, limiting access to oral health care, and impeding price competition.”

In June 2011, Maine passed legislation directing the Board to implement a two-year pilot project that expands the scope of practice of Independent Practice Dental Hygienists (IPDHs) to allow them to take X-rays in underserved areas without the presence of a dentist, as long as they meet certain education and experience requirements. The Board’s proposed rules to implement the pilot project would, however, restrict IPDHs to independently taking only bitewing and periapical X-rays, and would prohibit them from taking other types of X-rays.

The FTC staff comment recommends that the Board not impose the proposed restrictions, expressing concern that, if adopted, they “would impede the development of new arrangements for delivering oral health care services in ways contrary to the very intent of the pilot project.” The letter observes that the proposed rules provide no statement of the Board’s basis for its proposed restrictions; nor do they cite any evidence of safety concerns if IPDHs are allowed to independently process other types of X-rays.

The Commission vote approving the staff comment was 4-0. It was sent to Teneale E. Johnson, Executive Secretary, Maine Board of Dental Examiners, on November 16, 2011. A copy of the letter can be found on the FTC=s website and as a link to this press release. (FTC File No. V120000; the staff contact is Christopher M. Grengs, Office of Policy Planning, 202-326-2612.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(Maine Dental)

FTC Charges Telemarketers with Enabling Illegal Robocalling

As part of its ongoing efforts to crack down on illegal pre-recorded robocalls, the Federal Trade Commission is taking action against an operation that allegedly helped clients make illegal robocalls, call phone numbers on the National Do Not Call Registry, and mask Caller ID information, in violation of the FTC’s Telemarketing Sales Rule. This conduct generated tens of thousands of complaints from consumers. The FTC’s complaint, filed on its behalf by the Department of Justice, seeks to make the defendants pay civil penalties and stop the illegal calls.

According to the FTC’s complaint, Sonkei Communications, Inc., Peter J. Turpel, and Joseph Turpel sold robocall services to telemarketers offering credit card services, home security systems, and grant procurement programs. The defendants allegedly gave clients the means to hide their identity by transmitting inaccurate caller names on caller ID displays, such as “SERVICE MESSAGE” or “SERVICE ANNOUNCEMENT.” The FTC also alleged that the defendants knew, or consciously avoided knowing, that their clients called phone numbers on the National Do Not Call Registry.

The Department of Justice filed the complaint on behalf of the Commission in the U.S. District Court for the Central District of California on November 17, 2011. The Commission vote to refer the complaint to the DOJ for filing was 5-0.

NOTE: The Commission refers a complaint to the DOJ for filing when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.

(FTC File No. 1123060)

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