Days before Thanksgiving, the Federal Trade Commission secured a $3.15 million judgment against a telemarketing company that “defrauded financially distressed consumers throughout the United States by selling them bogus credit-card interest-rate-reduction services.”
In late 2017, the FTC brought claims against Higher Goals Marketing LLC (“HGM”) and multiple other defendants, alleging that the company violated Section 5(a) of the FTC Act prohibiting “unfair or deceptive acts or practices in or affecting commerce” and the Telemarketing Sales Rule. HGM failed to respond to the complaint, and the FTC moved for default against HGM.
The FTC alleged that HGM advertised, through prerecorded messages, that it could significantly and permanently reduce consumers’ credit card interest rates and save consumers thousands of dollars. The interest rate savings would come after a payment of an up-front fee ranging from $500 to $5,000. The FTC claims that, despite its promises, HGM failed to disclose that in addition to the up-front fee, the consumer may be required to pay fees for a reduced interest rate and that the reduced interest rate was not always permanent.
Based on these allegations and HGM’s default, the FTC moved for the entry of a judgment totaling $3,149,920.34 and a multifaceted permanent injunction. The FTC requested an injunction “enjoining HGM from: 1) participating in telemarketing; 2) advertising debt relief products or services; 3) engaging in misrepresentations and deceptive omissions; 4) engaging in certain types of unlawful payment and billing practices; 5) mishandling customer information; and 6) collecting on outstanding accounts.”
The Court, accepting the factual allegations pled in the complaint as true and looking to evidence from the FTC’s investigation into HGM’s practices, found that “HGM’s unlawful conduct and the need to protect the public from future violations” warranted the imposition of the injunction sought by the FTC. The Court also looked at the properly equitable relief and determined, based on HGM’s records, that the FTC was entitled to the full $3,149,920.34 in restitution.
This decision demonstrates how administrative agencies continue to take action to address telemarketing and robocalls.