Federal and state officials announced a widespread crackdown Tuesday against telemarketing scams that have bilked thousands of consumers, many of them elderly, out of tens of millions of dollars.
The sweep, dubbed “Operation Tele-PHONEY,” was coordinated by the Federal Trade Commission and has yielded more than 180 enforcement actions in the United States and Canada. That makes it the largest such operation the FTC has ever coordinated, the agency said.
William Kovacic, chairman of the FTC, said the 180 cases include new civil charges filed by the FTC against 13 telemarketers that defrauded more than 500,000 consumers out of $100 million.
In one case, a company called Handicapped & Disabled Workshops Inc. aggressively marketed household products, such as light bulbs and trash bags, to elderly consumers at exorbitant prices, the FTC said. Callers told consumers that the sale supports handicapped people, but Handicapped & Disabled Workers is a for-profit corporation, the agency said.
Betty Bruni’s 94-year-old mother was charged almost $400 by the group for light bulbs she received but didn’t remember ordering, the Syracuse, N.Y. resident said at a press conference. When Bruni sought a refund from Handicapped & Disabled Workshops, an employee said her mother’s money represented a donation rather payment for a product.
The company has in the past sold eight light bulbs for over $300, the FTC said in a complaint filed in federal court. The complaint asks the court to bar the company from telemarketing and seeks restitution for consumer losses.
“This organization completely took advantage of my mother,” Bruni said.
Handicapped & Disabled Workshops is based in Phoenix, according to the FTC’s complaint. Company representatives couldn’t be reached for comment.
In addition, state and federal law enforcement agencies have brought criminal cases against 90 defendants and eight cross-border fraud actions have been filed by Canadian authorities, the FTC said.
“Fraud is one of the worst poisons to commerce, and telemarketing fraud is one of its worst manifestations,” Kovacic said. “This is a remarkable exercise in strategic cooperation among different agencies.”
The FTC also filed complaints against two Canadian-based companies, Med Provisions and Union Consumer Benefits, that allegedly called consumers in the United States and offered discounted prescription drugs and medical services in return for upfront fees of nearly $400. Some consumers were told they would lose Medicare benefits if they didn’t sign up.
“All the claims are false, and many consumers could not get a refund,” the FTC said.
The FTC has won temporary restraining orders against 11 of the companies and is seeking court orders to permanently bar all 13 companies from any further telemarketing.
Kovacic and other officials urged consumers to do their part to fend off fraud.
“There’s an easy and surefire way to avoid getting stung,” said Idaho Attorney General Lawrence Wadsen. “Just say ’No,’ and hang up. It isn’t rude, it’s smart.”