Company Behind Billions Of Phony "Auto Warranty" Robocalls Shut Down By FTC

Have you ever answered a call from an unfamiliar number only to hear a recording tell you there is important information about your automobile warranty? You’re not alone, as the folks at the FTC have shut down an operation it says was responsible for billions of instances of deceptive dialing.

The FTC settlement announced this morning bans L.A.-area company SBN Peripherals, doing business as Asia Pacific Telecom Inc., from telemarketing and requires the company to hand over about $3 million in assets.

For those not familiar with the scam, here’s how it works. The company’s auto-dialing system calls you and a prerecorded message says there is urgent information you need to know about your vehicle’s warranty (they also ran a similar set-up regarding credit card interest rates). You would be prompted to press “1” for more information , at which point the call would be transferred to telemarketers who “used fraudulent practices to sell inferior extended auto service contracts or worthless debt-reduction services.”

The FTC reports that the company made more than 2.6 billion robocalls in a span of only 20 months. And even though only a tiny fraction of people who received these calls were suckered into talking to a sales agent, that was still around 12.8 million consumers.

These calls violated the law by contacting people without their written permission.

The actual order against the company imposes a $5.3 million judgment but since the defendant can’t pay all that in cash, the FTC will take:

* more than $1 million obtained from a bank account in Hong Kong,
* a $375,000 lien on a home, a 50 percent interest in an office building in Saipan,
* the defendants’ interest in seven parcels of undeveloped land,
* three cars and a recreational vehicle.

If you’re a fan of audio files, the FTC has posted some samples of the deceptive robocalls: Sample 1 (extended auto warranty), Sample 2 (credit card interest rates).