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Financial Services Law Insights and Observations

District court enters $13.9 million judgment in FTC robocall action

Courts FTC Enforcement Debt Relief Consumer Finance TSR FTC Act UDAP


On July 27, the U.S. District Court for the Middle District of Florida entered a nearly $13.9 million partially suspended judgment against six corporate and three individual defendants (collectively, “defendants”) allegedly operating an illegal robocall scheme offering consumers credit card interest rate reduction services in violation of the FTC Act and the Telemarketing Sales Rule. The action is part of a 2019 FTC crackdown on illegal robocalls named “Operation Call it Quits,” which included 94 enforcement actions from around the country brought by the FTC and 25 other federal, state, and local agencies (covered by InfoBytes here). According to the complaint, the defendants made deceptive guarantees to consumers that, for a fee, they could lower their credit card interest rates to zero percent permanently for the life of the credit card debt. However, the FTC alleged that not only do consumers not see a permanent reduction on their credit card interest rates, in some instances, the defendants obtained new credit cards with promotional “teaser” zero percent interest rates that only lasted a limited time, after which the interest rates increased significantly. Moreover, the defendants allegedly failed to tell consumers that they would have to pay additional bank or transaction fees. In addition, the complaint contended that the defendants also (i) initiated illegal telemarketing calls to consumers, including many whose phone numbers appear in the National Do Not Call Registry; (ii) tricked consumers into providing personal financial information, including social security numbers and credit card numbers; and (iii) in many instances, applied for credit cards on behalf of consumers who did not agree to use the service without their knowledge, authorization, or express informed consent.

The court’s order enters a nearly $13.9 million judgment, which will be partially suspended due to inability to pay. The defendants are also prohibited from collecting or assigning any right to collect payments from consumers who purchased the service, and are permanently banned from, among other things, engaging in the illegal behaviors involved in the action and from using the information obtained from consumers during the robocall operation.

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