Scammers Who Defrauded Scam Victims Barred From Scamming Anyone Else

Imagine you’ve been a victim of that old “woke up in a bathtub with my kidney gone” urban legend. As you stumble out of the hotel in urgent need of medical care, you come across a helpful doctor who will tend to your wounds… only to wake up in another tub with another missing organ. Replace “unauthorized donation of precious, life-sustaining organs” with “telemarketing fraud” and you’ve got the basis for a scam that took in nearly $3 million from people who had already been the victims of fraud.

The operators of a Florida-based telemarketing scam called Consumer Collection Advocates have been officially barred from making any further attempts to trick scam victims into paying more money for a service that doesn’t do anything.

The scam run by CCA, according to a complaint [PDF] filed last year by the Federal Trade Commission, worked like this:

Starting in 2011, CCA would cold-call consumers, claiming that the company ran a public service campaign that collects funds for victims of telemarketing fraud, like bogus timeshare or precious metal investments.

For an up-front fee — 20% of the amount previously lost to scammers — CCA said it would recover victims’ money. If the victim, likely already out a lot of cash because of the earlier fraud, pleaded an inability to pay the 20% fee, CCA would consider knocking it down to 10%.

CCA reps told these victims that the company could get back a substantial portion of the money they lost, and do so within 30 to 180 days.

Even if the consumer said “no thanks” to the CCA sales pitch, the company would send them a prepared contract, a limited power of attorney form, and other materials — and keep calling to make additional pitches.

Those who gave in an signed up for the CCA recovery service often found that their 10-20% fee — which ranged from a few hundred dollars to several thousand — might as well have been burned in the fireplace.

CCA, which had been so active in pursuing the customer’s business, suddenly stopped calling after it received the fee. When customers called to inquire about the status of their case, they were told that CCA needed more time.

“In numerous instances, consumers who pay the upfront fee… have not recovered the funds they lost in previous telemarketing transactions,” reads the FTC complaint. “Therefore, consumers have lost even more money on telemarketing fraud by also losing the money they spent to purchase Defendants’ recovery services.”

CCA’s unfulfilled promises that was likely to recover victims’ money in a short window of time violated the FTC Act’s prohibition against deceptive marketing.

More importantly, the Telemarketing Sales Rule bars any company from “Requesting or receiving payment of any fee or consideration from a person for goods or services represented to recover or otherwise assist in the return of money or any other item of value paid for by, or promised to, that person in a previous telemarketing transaction, until seven (7) business days after such money or other item is delivered to that person.”

Basically, even if CCA was selling a legitimate money-recovery service, the company still violated the law by demanding the upfront payment.

Today, the FTC announced that a federal court has approved a final judgment [PDF] against CCA, valued at $2.835 million.

The company and its owner are not only banned from doing any more business in the recovery services field, but also from telemarketing in general — “directly or through an intermediary, including by lead generation, consulting, brokering, investing, advising, or training.”

To pay back the $2.825 million, the court has seized and frozen seven bank accounts, and ordered CCA to turn over all customer info so that the FTC can contact victims and administer any repayments.

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