The Federal Trade Commission's fight against the infamous "Rachel from Cardholder Services" robocalls has produced a court order to give $1.7 million in refunds to defrauded consumers.
The case dates to November 2012, involving defendants including Universal Processing Services of Wisconsin, a payment processor, and telemarketer Hal Smith and his HES Merchant Services Company, the FTC said today. Per an order from US District Court for the Middle District of Florida, Universal Processing Services and HES will have to pay $1,734,972, which the FTC said "will be used to provide refunds to defrauded consumers."
"The court held Smith and HES liable for 11 violations of the FTC Act and the Commission’s Telemarketing Sales Rule (TSR), based on their participation in a deceptive telemarketing scheme purporting to be a credit card interest rate reduction service that used robocalls to solicit consumers," the FTC said. "The defendants failed to disclose the identity of the person(s) responsible for placing the robocalls and unlawfully calling numbers that had been registered on the FTC’s Do Not Call Registry."
Universal Processing Services, also known as "Newtek Merchant Solutions," was found liable for "assisting and facilitating" the violations "by providing the interface with the banks to handle credit card payments while knowing (or avoiding knowing) of the underlying TSR violations."
“The defendants blasted thousands of people with illegal robocalls and lied about helping relieve their credit card debt,” FTC Bureau of Consumer Protection Director Jessica Rich said in the commission's announcement.
Other defendants in the case had already agreed to settlements. You can see all the previous documents on this FTC page.
Issuing refunds will be tricky because "many of the defrauded consumers likely didn’t even know the actual name of the company they were dealing with," an FTC spokesperson told Ars. But it won't be impossible to get reimbursed. "Consumers who believe they paid money to the named defendants should file a complaint on the FTC’s website, ftc.gov, provide all of their relevant information, including how much money they lost during what time period, and then we’ll have their information when redress money becomes available," the FTC said. "We’ll also likely be getting lists of the company’s clients and will be using that to determine who is eligible for a refund."
Universal Processing Services also agreed to a settlement permanently barring it from processing payments for clients that it knows or should know are participating in schemes to defraud consumers. The company will also have to follow new screening and monitoring guidelines for accepting future clients.
The FTC has also been holding contests to identify technologies that can prevent robocalls, but the battle against this form of consumer fraud is far from over.
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