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Action on phone scams

May 14 2009

The Federal Trade Commission announced today that it has filed charges against several companies accused of making hundreds of millions of deceptive calls to consumers.

Senator Warner, who joined Senator Charles Schumer on Tuesday in announcing that FTC action was imminent, said he appreciated the FTC's prompt attention and aggressive approach to protect consumers.

He added:

“I know thousands of Virginians -- and millions of Americans -- will applaud this aggressive and quick FTC action to shut-down these scam artists. These automated calls are more than a mere nuisance to those consumers who’ve received them at home, at work and on their cell phones – which, depending on their cell plan, can end-up costing them minutes and money. These scam artists also have pressured unsuspecting consumers into buying bogus vehicle service contracts that they don’t need and that don’t even provide the coverage that was promised.

In two related complaints filed in federal court, the Commission took action against both the promoter of the phony extended auto warranties, as well as the telemarketing company that it hired to carry out its illegal, deceptive campaign.

In its complaints, the agency contends that the companies are operating a massive telemarketing scheme that uses random, pre-recorded phone calls to deceive consumers into thinking that their vehicle’s warranty is about to expire. Consumers who respond to the robocalls are pressured to purchase extended service contracts for their vehicles, which the telemarketers falsely portray as an extension of the manufacturer’s original warranty.

Yesterday, WAVY-TV in Norfolk did a report on Senator Warner's efforts to stop the phone scams: