The Federal Trade Commission said it had reached a settlement with two telemarketing companies that illegally called millions of consumers, banning the firms from the industry and requiring them to give up roughly $3 million in assets.
The FTC said the companies made approximately 2.6 billion calls to consumers from January 2008 through August 2009 with prerecorded telemarketing messages about lower interest rates or auto warranties that were about to expire.
The calls lured thousands of people across the country into buying expensive warranties that didn't offer much protection or signing up for worthless debt reduction services, the FTC said.
The FTC filed a lawsuit in 2010 in federal court in Chicago against SBN Peripherals, Repo B.V. and Asia Pacific Telecom Inc. for placing the calls or using the calls to sell their products.
Judge Morton Denlow approved the settlement March 22. It bans Johan Hendrik Smit Duyzentkunst and Janneke Bakker-Smit Duyzentkunst, who operated the companies, from telemarketing.
The settlement includes a $5.3-million fine that will be suspended when assets valued at approximately $3 million are turned in.
SBN used phone numbers registered to Asia Pacific Telecom Inc., with addresses in the Northern Mariana Islands, Hong Kong and the Netherlands, according to the FTC.
At least seven companies used Los Angeles-based SBN Peripherals' dialing service to sell their products. One company, Miami-based Dolce Group Worldwide, made nearly $4 million selling service contracts for automobiles, the FTC alleged in a separate suit filed in federal court in Miami.
Under FTC rules, telemarketers must obtain permission in writing from consumers before making prerecorded calls. Otherwise, the calls are illegal, and telemarketers face penalties of up to $16,000 per call.
Calls not related to selling goods or services are exempt. These include calls for political solicitations, flight delays, school closings and debt collections. Live telemarketing calls are allowed to consumers whose numbers are not listed in the Do Not Call registry.