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AG Cooper busts telemarketing fraud in Canada, Florida

Release date: 2/3/2005

Raleigh: Two telemarketing fraud operations located in Canada and Florida will no longer be able to cheat North Carolina consumers, Attorney General Roy Cooper announced today.

Cooper’s office joined with U.S. and Canadian authorities to shut down a major telemarketing fraud ring in Montreal today. Also today, a Florida telemarketing firm that charged customers for credit cards and credit relief services but failed to deliver has been ordered to stop contacting North Carolina consumers, Cooper announced.

“Telemarketing fraud artists are out to trick hard-working North Carolinians out of their money,” said Cooper. “We’ll keep going after these telemarketing outfits, whether they’re located here, in another state or another county.”

Cooper's Telemarketing Fraud Prevention Project has worked with Canadian and federal US officials in a twoyear investigation that today resulted in the closure of First Choice Teleservices telemarketing centers in Montreal, Canada and the arrest so far of more than 15 suspects. Cooper’s office works frequently with federal and international authorities to track down telemarketing scammers and other fraud artists who prey on North Carolinians.

One of Cooper’s investigators is currently in Montreal assisting those authorities with information provided by North Carolina victims as well as information from Cooper's investigations into related US-based firms. The suspects are alleged to have defrauded consumers through a variety of scams, including false promises of sweepstakes winnings and loans, grants and credit cards in exchange for a fee. The case is being prosecuted by the US Attorney for the Southern District of New York.

Today in Wake County Superior Court, Judge Donald W. Stephens granted Cooper’s request to stop another telemarketing firm, Phoenix Consumer Services of Florida, from targeting North Carolina consumers. Under terms of today’s preliminary injunction, Phoenix must stop placing calls or mailing packages to North Carolina while Cooper’s case against the firm goes forward.

Cooper filed suit last week seeking to stop Phoenix from violating laws on unfair and deceptive trade practices, telemarketing sales and loan brokering and to win refunds for North Carolina consumers. The telemarketing company, based in Largo, FL, is the eighth outfit from that area that Cooper has stopped from contacting North Carolina consumers with illegal telemarketing pitches within the past four years

As alleged in the complaint, Phoenix Consumer Services began calling North Carolina consumers in early 2003 with offers of pre-approved credit cards and credit repair services. The telemarketers told consumers that if they paid a fee of $129.95, the company would improve their credit or send them a pre-approved credit card within two weeks. After they paid the fee, consumers got a packet of information about credit and how to apply for credit cards from other financial institutions but no one ever got a credit card or help with their credit. Consumers who complained to Phoenix about the product and asked for a refund were never granted one.

When Phoenix telemarketers made their pitch, they asked consumers for their bank account information so the fee could be drafted from their account. In some cases, the telemarketers already had customers’ bank account numbers and read them out over the phone for confirmation. Some consumers who declined Phoenix’s pitch still had the fee

debited from their account. During one nine-month period, Phoenix attempted to debit fees from at least 1,885 North Carolina consumers’ bank accounts.

A total of 11 North Carolina consumers have filed complaints about Phoenix with Cooper’s Consumer Protection Division or the Federal Trade Commission. However, United Parcel Service records show that Phoenix mailed packets to more than 1,000 North Carolina addresses in a six-month period. Cooper’s office estimates that approximately 2,000 consumers across the state may be victims of this group’s scam. Any North Carolina consumer who has dealt with Phoenix is encouraged to file a complaint by calling 1-877-5-NO-SCAM.

Action against both Phoenix and First Choice Teleservices by Cooper's Telemarketing Fraud Prevention Project is funded by the US Department of Justice’s Bureau of Justice Assistance.

“Telemarketers will use every trick in the book to get your money, including dangling offers of easy credit over the phone,” Cooper said. “To make sure you don’t get lured in by these offers, sign up for the Do Not Call Registry and then report any telemarketer who calls you to my office.”

To sign up for the Do Not Call list, consumers can call 1-888-382-1222 or visit Consumers whose numbers are listed on the Registry can file a complaint with the Attorney General’s Office by calling 1-877-5-NO-SCAM.