Complain about a product or service

Judge Orders Halt to Warranty Robocalls

Senators spur FTC investigation against automated scammers

May 16, 2009

A federal judge has issued a temporary restraining order stopping telemarketing company Voice Touch, Inc., its principals James and Maureen Dunne, its business partner Network Foundations LLC, and Network Foundations principal Damian Kohlfeld from making any further calls in violation of the Do Not Call Registry and other provisions of the Telemarketing Sales Rule and the FTC Act.

The move follows charges by the Federal Trade Commission that the defendants were operating a massive telemarketing scheme that used random, recorded phone calls to deceive consumers into thinking that their vehicle’s warranty is about to expire.

“Today the FTC has disconnected the people responsible for so many of these annoying robocalls,” said FTC Chairman Jon Leibowitz. “We expect to see a dramatic decrease in deceptive auto warranty calls, but we are still on high alert.”

If consumers continue to receive unsolicited robocalls to numbers on the Do Not Call registry, they should report them to DoNotCall.gov.

Related matter

In a related matter filed by the FTC, Judge John F. Grady of the United States District Court for the Northern District of Illinois issued a temporary restraining order against automobile warranty sales company Transcontinental Warranty, Inc., and its CEO and president, Christopher Cowart, who are clients of Voice Touch.

In both cases, the court found that the FTC established a likelihood of success on the merits.

The court barred deceptive claims about extended warranties, froze the defendants’ assets, and appointed receivers over Transcontinental and Network Foundations to ensure that documents are preserved and assets are not dissipated.

The restraining orders are in effect until a preliminary injunction hearing set for May 29, at which time the judge will reassess what type of relief should remain in place until the case proceeds to trial.

Constant annoyance

The spam calls have targeted Americans randomly on both cell phones and landlines, even when the recipient is on the federal "Do Not Call" registry. The call plays an automated message that offers a deal on an extended car warranty.

U.S. Senators Charles E. Schumer (D-NY) and Mark Warner (D-VA) had pressed the FTC for action and announced a few days ago that the agency expected to take action soon.

"It's about time these robocalls were terminated," Schumer said. "This prompt, aggressive action by the FTC should provide a bit of relief to the Americans besieged by these fraudulent calls. Almost everyone knows someone who's received these calls. It's about time we find out who's behind them, and put a stop to this harassment."

"In addition to violating the 'Do Not Call List' law, these scammers are peddling phony car warranties that exploit consumers," said Warner. "We've heard of Virginians receiving these calls when they do not even own a car, and others who are understandably upset that the automated calls tie-up their phone lines, costing them time and money."

Schumer and Warner revealed that they themselves have both received these calls in recent weeks.

Unrecognized number

The scam begins when someone's phone rings from an unrecognized number. The caller then turns out to be a computerized voice selling car warranties with voice starting out by saying "Out of warranty? You are still eligible to reactivate warranty coverage. This is the final call before we close the file."

The recording typically gives the caller an option to stop receiving calls, usually saying, "press two to be removed from the follow up list." However, the calls continue to come. The company making the calls has no idea what car a person is driving because the calls are randomly generated, so their contention that your warranty "is about to expire" is bogus.

In his letter to Leibowitz, Schumer wrote, "Not only are these calls a nuisance, but they tie up land lines and can eat up a user's cell phone minutes, possibly leading to a higher cell phone bill due to overage charges. Consumers should not have to pay in both money and time for this or any other type of robo-dialer harassment."

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |