Feds shut down telemarketing scam aimed at elderly
by Chris Morran, The Consumerist
It’s bad enough to call up an elderly person and mislead him or her into paying a pile of cash for a medical alert service they don’t need or want. But what takes one Brooklyn-based telemarketing scheme to the next level was its alleged tendency to bill consumers thousands of dollars for something they never ordered.
The Federal Trade Commission has gotten the court to temporarily shut down the operations of a company called Instant Response Systems, which the agency claims ‘used deception, threats, and intimidation to induce elderly consumers to pay for medical alert systems they neither ordered nor wanted.’
Per the FTC’s complaint [PDF], filed in the U.S. District Court for the Eastern District of New York, telemarketers for Instant Response Systems would call elderly consumers, most at least 70 years of age. The recipients of these calls weren’t just elderly, the FTC says many were in poor health, lived on fixed incomes, and often relied on others to help with their finances. And regardless of age and infirmity, many of these people had their phones listed in the National Do Not Call Registry.
The telemarketers would claim they were calling in response to a request for information placed either by the call’s recipient or a loved one, even though many people who complained to the FTC say they have no idea how the telemarketers acquired their phone numbers. The telemarketer would then ask questions about the person’s health and medical care before pitching them on a pricey service ($817 to $1,602) that supposedly provides around-the-clock medical alerts (via a pendant worn by the customer).
Problem is, even consumers who say they never ordered this service were then billed by Instant Response. They would receive notifications in the mail reading, ‘Congratulations! In a few short days you will receive your monitoring system’ As you agreed in your conversation, please send a check for $1,196 in the enclosed stamped envelope.’
When one customer put a stop-payment on a check to the company, she received the following correspondence:
‘You gave us your banking information by telephone and authorized us to use it to collect your promised payment. However, when we submitted the payment to your bank, it ‘bounced.”
‘You have embarrassed us and damaged our reputation. We had to pay bank fees, in addition to accounting, manpower, and other costs. We will NOT absorb these costs or pass them on to our paying subscribers.
‘We suggest that you consult an attorney and ask about the criminal and civil consequences of bouncing checks.’
The FTC alleges that in another instance, the company sent a bogus police report to a consumer, describing the pendant as ‘stolen property’ if it was not paid for immediately.
Customers who tried to dispute these bogus bills or tried to contact the company about returning unwanted and unopened packages claim they were often unable to reach anyone. In those cases where they did reach a company rep, the consumers claim the employee merely repeated the false accusations that the service had been ordered and ‘to pay Instant Response Systems immediately or face legal consequences.’
The FTC has charged the company and its principals, one of whom had previously been sued by the FTC for selling phony licenses and diplomas, with making illegal misrepresentations to consumers, violating the Telemarketing Sales Rule by calling phone numbers on the DNC Registry, and violating the Unordered Merchandise Statute by sending consumers pendants they did not order.