In today’s economic environment, many people are struggling to stay afloat. Individuals in Florida and across the nation have racked up credit card debt and are underwater on their mortgages, putting many debtors in jeopardy of losing their homes. In such situations, people become desperate for solutions. Unfortunately, deceptive business practices are being used to take advantage of financially strapped individuals seeking debt relief.
This is the case with a robocall scheme that falsely claimed that “cash grants” from federal, state, and local governments, private foundations, and “wealthy individuals” were readily available to consumers. As part of an ongoing effort to crack down on such schemes, the Federal Trade Commission filed a lawsuit against the individuals operating the scheme.
The defendants had falsely advertised the availability of “Free Grant Money” by posing the question, “Did you know that grant money exists for almost any purpose and does not need to be repaid?” The website where the question appeared then referred consumers to other grant-related websites that charged a fee for providing general information about obtaining grants from public or private sources.
In addition to the false claims, the defendants were responsible for more than eight million robocalls to consumers. Moreover, 2.7 million of the calls were made to phone numbers on the National Do Not Call Registry. Those who received the robocalls were told they had already qualified for “grants,” and promised that consumers could receive up to $25,000 to overcome personal financial problems.
As a result of the recent lawsuit, a federal judge has ordered the defendants behind the scheme to pay $30 million in civil penalties and give up more than $1.1 million in ill-gotten gains for violations of the FTC Act and the Telemarketing Sales Rule.
It is unfortunate that individuals will resort to such unethical business practices that seek to take advantage of people who are desperate for financial assistance. Hopefully this case is a reminder to Florida readers that promises that sound too good to be true probably are.
Source: Statesboro Business & Lifestyle Magazine, “Deceptive Robocaller Lawsuit Leads to Record $30 Million in Penalties,” Allen Harkleroad, April 2, 2012