Washington, DC - Appearing as Inspector Harry Callahan, Clint Eastwood added a famous phrase to the lexicon. As a suspect pondered his next move, Callahan invited him to consider the consequences of his actions: “You’ve got to ask yourself this question: Do I feel lucky? Well, do ya?” The context is much different, of course, but a telephone honeypot, an investigative tool used in a law enforcement action filed by the FTC and the Florida Attorney General, suggests that robocallers might want to ask themselves a similar question.
The case against Orlando-based Life Management Services of Orange County, LLC and related defendants is part of a multi-agency crackdown on illegal robocalls. The story starts with a tangled web of corporations and individuals alleged to have initiated hundreds of thousands of robocalls offering consumers purported reductions in their credit card interest rates. Using generic names like “Bank Card Services” and “Credit Assistance Program,” they held themselves out as a “licensed enrollment center” for major credit cards that can offer big savings to cash-strapped consumers.
According to the complaint, when consumers pressed 1 for more information, telemarketers gained their confidence and then asked for upfront fees ranging from $500 to $5,000 to get the advertised reduction in their interest rates. Sometimes the defendants made a rudimentary attempt to contact the person’s credit card company, but consumers say they almost never got the promised rates or savings.
The lawsuit alleges the defendants didn’t stop there. Once they had people on the hook, they followed up with calls offering bogus credit card debt elimination services. And this pitch was a real whopper.
Telemarketers told consumers that credit card companies who charged excessive interest rates had paid into a government “fund” earmarked to help people pay off their credit card debts. For an upfront fee of between $2,500 and $20,000, the telemarketers said they could help consumers tap into that cash to eliminate their debt. Except for one problem: No such fund exists. Factor in late fees, higher interest rates, and dinged-up credit scores, and the complaint alleges that consumers found themselves even deeper in debt.
The lawsuit charges the defendants with a host of violations, including the false interest rate reduction claims and bogus debt elimination promises – not to mention the robocalls and upfront fees, both of which violate the Telemarketing Sales Rule. A federal judge in Orlando granted a temporary restraining order, pending an upcoming hearing.
What about that investigative tool law enforcers are using in the fight against illegal robocalls? We usually keep mum about methods, but we’ve made an exception this time. As explained in a declaration filed in the Life Management Services case, the FTC used a telephone honeypot – a bank of phone lines designed to attract robocalls. Posing as consumers, FTC investigators can interact with callers in real time to make undercover purchases and identify who’s placing illegal robocalls. The FTC used the honeypot to collect evidence in this case, as well as in other recent actions involving robocalls that pitched medical alert devices and vacation packages.
The Life Management Services case and additional actions by the Department of Justice, FCC, state AGs, and enforcement authorities in Canada and the UK are part of an international crackdown on illegal robocalling. It comes just as the FTC and 11 regulatory organizations around the world have signed a memorandum of understanding to share information and intelligence in the global fight against unsolicited messages and calls. The signers are all members of the London Action Plan, a network of public agencies and private sector representatives committed to promoting cooperation in the battle against spam, unsolicited calls, and related problems like online fraud and deception, phishing, and the dissemination of viruses.
Between increased global cooperation and the use of technology, the tables are finally turning on robocallers. People who initiate illegal calls should consider this: Is the person on the other end of the line a consumer responding to your pitch? Or could it be an undercover investigator using a honeypot to collect information about companies placing illegal calls? In the words of Inspector Callahan, “You’ve got to ask yourself this question: Do I feel lucky? Well, do ya?