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Compliance

Judge Orders Halt to Illegal Robocalls

May 22, 2009

Judge John F. Grady of the United States District Court for the Northern District of Illinois issued on May 15 a temporary restraining order (TRO) against the parties involved in a telemarketing campaign of illegal robocalls.

The TRO stops 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 Federal Trade Commission (FTC) filed the case on May 14, charging that the defendants were operating a massive telemarketing scheme that used random, pre-recorded phone calls to deceive consumers into thinking that their vehicle’s warranty is about to expire.

“(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.

In a related matter filed by the FTC, Judge Grady yesterday 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.

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The Federal Trade Commission is asking a federal court to shut down a telemarketing campaign that has been bombarding U.S. consumers with hundreds of millions of allegedly deceptive “robocalls” in an effort to sell them vehicle service contracts under the guise that they are extensions of original vehicle warranties.