On May 20, 2008, Attorney General Jack Conway announced a crackdown on illegal telemarketing, having obtained a temporary restraining order to halt one fraudulent telemarketer and a $10,000 civil penalty against a second company for violating Kentucky’s Do Not Call law.
The actions are part of a joint operation between state attorneys general and the Federal Trade Commission (FTC). The partnership and telemarketing fraud sweep is being dubbed Operation Telephoney.
“When companies break the law by violating the Do Not Call list, they invade consumers’ homes and violate their trust,” Conway said. “Fraudulent telemarketers not only invade our privacy, they steal our money. It’s important for businesses to understand that if they break the law, they will face prosecution and significant penalties.”
In the first action, Conway’s Office of Consumer Protection filed a joint suit with the FTC to obtain a temporary restraining order from the U.S. District Court in Atlanta against Direct Connection Consulting, Inc., owner Elliott Borenstein and office manager Joann R. Winter, of Alpharetta, Ga.
The legal action stems from deceptive marketing and illegal billing practices by the company in connection with sales of its SureTouch long-distance calling cards. Investigators found that the company fraudulently told consumers it represented a major retailer or credit card company, placed unauthorized charges on a consumer’s card, debited bank accounts without authorization or informed consent, provided false identities and refused consumer’s request not to be called again, sometimes calling up to six times a day until consumers listened to the pitch.
Kentucky and the federal government are seeking injunctive relief, civil penalties and consumer restitution.
In the second telemarketing enforcement action, the Attorney General’s Office obtained a $10,000 settlement from DNH Consulting, of Oviedo, Fla., which also does business as Health Services. Investigators report that DNH violated Kentucky’s telemarketing laws while selling a discount prescription drug card by contacting Kentucky consumers whose residential phone numbers were listed on the Do Not Call list. The Attorney General also alleges that DNH violated the law by failing to provide consumers required disclosures, including notifying consumers of their 14-day right to cancel a telemarketing sales contract.
DNH agreed to enter into an assurance of voluntary compliance and pay $10,000 in civil penalties. DNH does not admit any violation of law or admit to any liability in reaching the settlement. The assurance of voluntary compliance was entered by Franklin Circuit Judge Thomas D. Wingate on May 15, 2008.
For more information about Operation Telephoney, visit www.ag.ky.gov.