FTC Action Alleges Violation of Telemarketing Sales Rule for Delivering Ringless Voicemails

The Federal Trade Commission recently announced that it has taken action to stop an alleged interconnected web of operations purportedly responsible for delivering tens of millions of unwanted Voice Over Internet Protocol and ringless voicemail bogus 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.

“This case targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially,” said FTC lawyer 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, and many others.  Stratics also allegedly sold access to its platform for delivering RVM, a call that goes to a consumer’s voicemail without ringing their phone.  Allegedly, 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 various individual and corporate defendants.

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 allegedly provided debt validation letter writing services and payment processing as part of Provident Solutions’ purported 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
  • 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
  • Initiating illegal pre-recorded telemarketing messages, commonly known as robocalls
  • Failing to make verbal disclosures required by the TSR, including the identity of the debt relief sellers
  • Misrepresenting material aspects of debt relief services
  • Charging or receiving a fee from consumers before providing a debt relief service

One set of defendants has agreed to settle the complaint in this case.  A proposed court order announced, would, if approved by the court, prohibit debt relief lead generator KASM, also doing business as Kasm, Inc., and the company’s owner 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.

Richard B. Newman is an FTC advertising practices attorney at Hinch Newman LLP.  Follow FTC defense lawyer on Twitter.

Informational purposes only. Not legal advice. May be considered attorney advertising.

Richard Newman

Richard B. Newman is a nationally recognized FTC advertising compliance, CID investigation and regulatory enforcemetn attorney. He regularly provides advertising counsel and represents clients in high-profile investigations and enforcement proceedings initiated by the Federal Trade Commission, state attorneys general, departments of consumer affairs, and other federal and state agencies with jurisdiction over advertising and marketing practices. Richard is also an ecommerce lawyer and spam defense attorney. His practice additionally focuses upon false advertising defense, data privacy, cybersquatting, intellectual property law and transactional matters relating to the dissemination of national advertising campaigns, including the gamut of affiliate marketing, telemarketing, lead generation, list management and licensing agreements. Richard advises clients on how to minimize the legal risks associated with digital marketing, email marketing, telemarketing, social media influencer campaigns, endorsements and testimonials, negative option marketing models, native advertising, online promotions and comparative advertising,





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Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/judicial process. This blog is sponsored by Hinch Newman LLP.

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