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The FTC Wins Injunction Against Gift-Card Scam

The Federal Trade Commission is enforcing a temporary injunction against telemarketers who offer free gift cards to get consumers to give out their bank account information.

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In the so-called "Wal-Mart shopping spree scam," the telemarketers allegedly cold-called consumers and promised them gift cards, "shopping sprees," movie passes and gas vouchers they say are worth $200 to $500, then asked consumers to pay a small shipping and handling fee in order to collect consumers' bank account data. The telemarketers then coerced consumers to buy memberships in purported discount-buying programs, the FTC charges.

The FTC's complaint, filed Feb. 28 in federal district court in Los Angeles, also says the defendants called reluctant consumers repeatedly until they bought memberships, and wouldn't let consumers cancel those memberships.

The temporary injuction prohibits the defendants from making misrepresentations to consumers and from engaging in deceptive or abusive telemarketing practices. It also freezes their assets and appoints a temporary receiver over the corporate defendants.

The complaint was filed against five corporations and nine individuals: Universal Premium Services, Inc. (also known as Premier Benefits, Inc.), Orange, CA; Consumer Reward Network, Canoga Park, CA; Star Communications, Los Angeles; Membership Services Direct (aka Continuity Partners), Las Vegas; Connect2USA, of Las Vegas; and Brian K. MacGregor; Harijinder Sidhu; Joseph F. Larosa, Jr.; Pranot Sangprasit; William Thomas Heichert; Michael Howard Cushing; Paul P. Tosi; and Manh D. Cao.

The FTC settled a similar telemarketing case last month with Conversion Marketing, which offered "free" samples of tooth-whitening kits, then charged consumers' bank accounts without permission by enrolling them in a program for monthly shipments

Conversion Marketing agreed to pay $474,000 ($463,000 in consumer redress, $11,000 in civil penalties) and is prohibited from misrepresenting its products or the terms of its programs.

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The FTC Wins Injunction Against Gift-Card Scam
Promo Sourcebook

The FTC Wins Injunction Against Gift-Card Scam

The Federal Trade Commission is enforcing a temporary injunction against telemarketers who offer free gift cards to get consumers to give out their bank account information.

Article Tools


Most Popular Articles

In the so-called "Wal-Mart shopping spree scam," the telemarketers allegedly cold-called consumers and promised them gift cards, "shopping sprees," movie passes and gas vouchers they say are worth $200 to $500, then asked consumers to pay a small shipping and handling fee in order to collect consumers' bank account data. The telemarketers then coerced consumers to buy memberships in purported discount-buying programs, the FTC charges.

The FTC's complaint, filed Feb. 28 in federal district court in Los Angeles, also says the defendants called reluctant consumers repeatedly until they bought memberships, and wouldn't let consumers cancel those memberships.

The temporary injuction prohibits the defendants from making misrepresentations to consumers and from engaging in deceptive or abusive telemarketing practices. It also freezes their assets and appoints a temporary receiver over the corporate defendants.

The complaint was filed against five corporations and nine individuals: Universal Premium Services, Inc. (also known as Premier Benefits, Inc.), Orange, CA; Consumer Reward Network, Canoga Park, CA; Star Communications, Los Angeles; Membership Services Direct (aka Continuity Partners), Las Vegas; Connect2USA, of Las Vegas; and Brian K. MacGregor; Harijinder Sidhu; Joseph F. Larosa, Jr.; Pranot Sangprasit; William Thomas Heichert; Michael Howard Cushing; Paul P. Tosi; and Manh D. Cao.

The FTC settled a similar telemarketing case last month with Conversion Marketing, which offered "free" samples of tooth-whitening kits, then charged consumers' bank accounts without permission by enrolling them in a program for monthly shipments

Conversion Marketing agreed to pay $474,000 ($463,000 in consumer redress, $11,000 in civil penalties) and is prohibited from misrepresenting its products or the terms of its programs.

For more coverage on legal & regulatory news

For more stories on premiums & incentives


Acceptable Use Policy
blog comments powered by Disqus

Special Report on Email

Get the E-mail Credit You Deserve


Executive summary:
How important is it that your e-mail campaigns get white listed? Well, look at it this way: How important is it that your messages get delivered?
Download the full report

Sponsored By:

Featured Webinar

Know your Customer - Grow your Business with Targeted Email Marketing


In an industry littered with competition and product variation, promotional suppliers, event marketers, agencies, and other promotional vendors need to re-evaluate the ways in which they collect data and communicate with potential customers. No longer are recipients tolerating irrelevant marketing materials, via email or any other medium. Sending relevant, targeted offers that they WANT to receive is essential in order to acquire new customers and grow your business.
Learn more now...

RESOURCES: Helping You Find Solutions

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