Part one of a three-part series
“They call every day offering to lower my credit card limit. I told them I don’t have a credit card balance and they hung up on me. They still continue to call.”
So reads one of countless complaints on whocallsme.com and other Web sites where consumers post inquiries about telemarketing abuses. The Federal Trade Commission’s Do Not Call Registry gets more than a million complaints annually from citizens annoyed by harassing phone calls.
Last year, the FTC shut down a few egregious violators of the Do Not Call law. The interest rate calls we all suffered through, you may remember, opened with an offer to drop your credit card interest rates to as low as 6.9 percent.
They asked you to press 1 if you’re interested; 2 to get removed from the phone list. Those who pressed 2 still got plagued with the calls.
Do Not Call won’t register
Monday: “Do Not Call” violators get a free pass
Tuesday: Who are the biggest offenders?
Wednesday: Toothless enforcement means no enforcement
Those who pressed 1 got a vague promise that the caller can work with a bank to lower interest rates. If someone gets suspicious or asks tough questions, the caller hangs up, sometimes with an obscene outburst first. Those who swallowed the bait and gave a credit card number got charged between $495 and $1,495 in return for a promise never fulfilled.
Credit card robocalls became the second largest source of complaints last year to the registry. The FTC has sued three companies plus related individuals. Some of the same principals charged with the fraud were also allegedly involved in the other major robocall scam of the year: Offers of bogus auto warranties.
The perpetrators made hundreds of millions of calls using various names, including Great Atlantic Warranty and Transcontinental Warranty, Inc. Recordings told people (even those without cars) their auto warranty was about to expire. Those who bought were taken for a ride: charged between $2,000 and $4,000 for worthless warranties.
Though the FTC and state regulators were able to stop the scams eventually, their ability to do justice to the perpetrators and provide restitution to victims is limited. The law only allows it to go so far.
Regulators can’t always collect the fines they impose; nor can they criminally prosecute fraudsters. And the law exempts many companies who continue to annoy plenty of people.
The FTC has frozen the assets of the Florida-based warranty scammer and Voice Touch Inc., which supplied the equipment for the robocalls. The FTC and Voice Touch principal James Dunne settled the case in March.
Without admitting wrongdoing, Dunne forked over about $655,000 plus proceeds from the sale of his Florida home and two luxury cars. He was barred for life from telemarketing. Though he might not be able to drive away in his Porsche or Lexus, he walked away a free man.
Meanwhile, Transcontinental was shut down. Its principal, Christopher Cowart, doesn’t like unwanted phone calls either. He didn’t respond to a message left on his home answering machine.
Cowart and Transcontinental agreed to pay $24 million in fines, which was easy for them to do since they won’t have to pay because of a loophole in the law.
Charles Pekow is a freelance reporter in Washington.
