Feds Shut Down Telemarketing Scam That Pitched Money-Making Schemes & Bogus Grants

Image courtesy of Matt Reinbold

As wonderful as it might sound, odds are that no one is trying to call you to give you free money, and anyone who dangles a get-rich-quick scheme in front of you should be quickly ignored. Yet federal regulators say  telemarketers tricked seniors and veterans out of their money with these sorts of scams.

The Federal Trade Commission Friday announced that it had charged three individuals and five companies with operating a telemarketing scheme that sold worthless money-making opportunities and phony grants to seniors, veterans, and consumers already strapped with debt.

According to the FTC complaint [PDF], the companies — identified as Blue Saguaro Marketing, MarketingWays.com, Max Results Marketing LLC, Oro Canyon Marketing II, and Paramount Business Services LLC — misled potential victims by promising that they could make easy money.

The scheme generally took on two different variations: the telemarketers would claim to be with Amazon or the federal government.

In the first variation, which began in the fall of 2014, the complaint alleges that the companies would falsely claim they represented Amazon, and promised customers an easy money-making opportunity.

In exchange for fees ranging from several hundred to several thousands of dollars, the companies would offer to create a website linking to Amazon.com where victims could earn thousands of dollars every month in commissions from sales.

The telemarketers promised to advertise the websites and use search engine optimization to drive customers to it.

In reality, the FTC complaint alleges that the companies had no affiliation to Amazon and did nothing to create tailored or even functional websites for consumers.

The second variation began in mid-2015. According to the FTC, the telemarketers called potential victims, claiming to represent the government, and informed them they were eligible for government and corporate grants to help pay for home repairs, medical costs, and paying down debt.

To determine how much a consumer was eligible for, the companies would ask for a victims’ personal information, such as age, employment, and driver’s license and credit card numbers.

The companies asked for thousands of dollars up-front and falsely promised that consumers would receive grants worth tens of thousands of dollars in 90 days.

Once a customer was on the hook for a grant, the telemarketers would use a tactic called “reloading” to sell additional grants. This was typically done by promising victims that they could quality for a larger grants by forming a limited liability company.

Consumers received no money from these schemes, according to the FTC. Victims who called the defendants to complain were ignored, and the defendants provided no refunds.

At the FTC’s request, a federal court temporarily halted the operation. With the complaint, the agency seeks to end the alleged illegal practices and obtain money for victims.

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