The Federal Trade Commission sued to stop an interconnected web of operations responsible for delivering tens of millions of unwanted Voice Over Internet Protocol (VoIP) and ringless voicemail (RVM) phony debt service robocalls to consumers nationwide. The Department of Justice (DOJ) filed the complaint in federal court on the FTC’s behalf.
The DOJ also filed a proposed consent order against one of the companies and individuals involved in the operation, which would, if approved by the court, bar them from making further misrepresentations about debt relief services and ordering them to comply with the Telemarketing Sales Rule (TSR).
“This case targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take aggressive action to protect consumers from the scourge of illegal robocalls.”
“The Department of Justice is committed to stopping individuals and companies from making illegal robocalls and peddling predatory debt relief services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to enforce the FTC Act and the Telemarketing Sales Rule against those who use misleading sales tactics to prey on consumers.”
According to the complaint, Stratics Networks, Inc.’s outbound calling service enabled its clients to route and transmit millions of robocalls using VoIP technology. From at least 2013 to 2020, Stratics sold its wholesale SIP termination service to other VoIP technology service providers, including Texas-based defendants Netlatitude, Inc. and its owner Kurt Hannigan, and many others. Stratics also sold access to its platform for delivering RVM, a call that goes to a consumer’s voicemail without ringing their phone. Netlatitude used Stratics’ wholesale SIP termination services to operate its own RVM service, which it then sold to a foreign telemarketer of debt relief services.
Other Stratics customers included lead generation telemarketers that allegedly used Stratics’ services to blast illegal robocalls to millions of consumers nationwide. Despite receiving repeated notices from USTelecom’s Industry Traceback Group that some customers’ robocall traffic was likely illegal, the complaint outlines how Stratics continued to assist a California-based debt relief scheme, which included defendants Kasm, and the related companies of Atlas Marketing Partners, Inc.; Atlas Investment Ventures, LLC; Tek Ventures, LLC, doing business as Provident Solutions, and the companies’ owners.
The complaint alleges that these companies used Stratics’ RVM service to run an illegal robocall campaign pitching supposed debt relief services to consumers. Another defendant, Nevada-based Ace Business Solutions LLC and its owner, Sandra Barnes, allegedly provided debt validation letter writing services and payment processing as part of Provident Solutions’ debt relief scam.
The complaint alleges that this web of interconnected platform providers, lead generators, telemarketers, and debt relief service sellers violated the TSR in many ways, including:
- Making misrepresentations regarding debt relief services (Atlas Marketing Partners, Atlas Investment Ventures, Tek Ventures also d/b/a Provident Solutions, Eric Petersen, Todd DiRoberto, Kasm, and Kenan Azzeh);
- Assisting and facilitating violations of the TSR by knowing, or consciously avoiding knowing, that their customers’ operations caused the initiation of telemarketing calls to numbers on the FTC’s Do Not Call Registry, as well as calls in which telemarketers failed to disclose the identity of the seller and services being offered (Stratics, Netlatitude, and Kurt Hannigan);
- Initiating illegal pre-recorded telemarketing messages, commonly known as robocalls (Atlas Marketing Partners, Atlas Investment Ventures, Tek Ventures, LLC also d/b/a Provident Solutions, Eric Petersen, Todd DiRoberto, Kasm, and Kenan Azzeh);
- Failing to make oral disclosures required by the TSR, including the identity of the debt relief sellers (Atlas Marketing Partners, Atlas Investment Ventures, Tek Ventures also d/b/a Provident Solutions, Eric Petersen, Todd DiRoberto, Kasm, and Kenan Azzeh);
- Misrepresenting material aspects of debt relief services (Atlas Marketing Partners, Atlas Investment Ventures, Tek Ventures also d/b/a Provident Solutions, Eric Petersen, Todd DiRoberto, Kasm, and Kenan Azzeh); and
- Charging or receiving a fee from consumers before providing a debt relief service (Atlas Marketing Partners, Atlas Investment Ventures, Tek Ventures also d/b/a Provident Solutions, Eric Petersen, Todd DiRoberto, Ace Business Solutions, and Sandra Barnes).
The Kasm Consent Order
One set of defendants has agreed to settle the complaint in this case. A proposed court order announced today, would, if approved by the court, prohibit debt relief lead generator KASM, also doing business as Kasm, Inc., and the company’s owner, Kenan Azzeh, from making the misrepresentations alleged in the complaint and from violating the TSR. It also requires the defendants to review the methods used by their existing lead generators, determine and obtain leads sold or offered to them illegally, and stop buying leads from any lead generator found to have sold them such leads.
Finally, the proposed consent order imposes a $3.38 million judgment against the defendants, which will be partially suspended based on their inability to pay, after they pay the FTC $7,500 to be used for consumer redress. If they are later found to have misrepresented their financial condition, the full amount will immediately become due.
The Commission vote authorizing the staff to refer the complaint and proposed consent order to the Department of Justice for filing was 4-0. The DOJ filed the documents in the U.S. District Court for the Southern District of California. Litigation continues against the non-settling defendants. Christopher E. Brown was the primary FTC staffer on this matter.
NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The case will be decided by the court.
Official news published at https://www.ftc.gov/news-events/news/press-releases/2023/02/ftc-sues-stop-interconnected-web-voip-service-providers-carrying-robocalls-pitching-phony-debt
Images courtesy of PixaBay