WASHINGTON, D.C. — At the Federal Trade Commission’s request, a federal court has ordered a Canadian telemarketer and his four companies to pay more than $5.1 million to American and Canadian consumers who were duped into paying hundreds of dollars on false claims made by the defendants. Victims were told the defendants had buyers lined up for their cars, and that refunds would be provided if the cars weren’t sold. The court also permanently banned the defendants from telemarketing and payment processing.

According to the FTC’s complaint against Matthew J. Loewen and his companies, the telemarketer and his firms called consumers who listed vehicles for sale on websites such as Craigslist or eBay. In exchange for a fee, typically $399, the defendants claimed that they would put the consumer in touch with a buyer, often telling victims they had undervalued the vehicle and that the price the buyer was willing to pay would cover the defendants’ fee. The defendants also offered $99 “refund insurance,” which falsely promised sellers a risk-free refund of their initial fee if the vehicle was not sold in 90 days.

On Oct. 29, 2013, the U.S. District Court for the Western District of Washington found the FTC’s allegations to be true and ruled that the defendants’ telemarketing operation violated the FTC Act and the FTC’s Telemarketing Sales Rule. According to the ruling, the defendants’ promises made to victims were “simply false,” and the impression they conveyed of easily obtainable refunds was “decidedly deceptive.”

The court also noted that the defendants operated under a series of ever-changing corporate names (including Auto Marketing Group, Secure Auto Sales and Vehicle Stars) to evade detection. It also cited the defendants’ high rate of credit card chargebacks as further proof of the fraudulent nature of the defendants’ operation. 

In addition to the ordering Loewen and his co-defendants to pay $5.1 million, the court permanently banned Loewen and his companies from telemarketing and payment processing. The order also bars the defendants from misrepresenting material facts about any goods or services, selling or otherwise benefitting from consumers’ personal information, failing to properly dispose of customer information and violating the Telemarketing Sales Rule.