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Fitzgerald Lewis, president of Quartercall Communications, Inc., has agreed to pay a $10,000 civil penalty to settle federal charges that he and his company failed to provide key information to potential investors in their pay phone business opportunity, as required by the Federal Trade Commission's Franchise Rule. Quartercall and Lewis also have pledged to accurately disclose to potential purchasers the names, addresses and telephone numbers of at least 10 prior purchasers and to provide documentation for earnings claims they make. The defendants offer pay telephone vending opportunities and license purchasers to use their "Quartercall" trademark in providing 25 cents- per-minute telephone service to consumers.

Quartercall is based in Reston, Virginia.

Charges against Quartercall and Lewis were filed in July as part of "Project Telesweep," an unprecedented federal/state crackdown on business opportunity fraud. This case was one of nearly 100 that have been filed nationwide by the FTC, the U.S. Justice Department, and business opportunity regulators in 20 state securities divisions and attorneys general offices. Law enforcement officials participating in Project Telesweep also issued an extensive consumer bulletin offering would-be investors tips on how to avoid scams and information about the pre-purchase data they are entitled to receive from franchise sellers.

The complaint against Lewis and Quartercall alleged that they failed to provide a complete and accurate basic disclosure document containing all the information required by the Franchise Rule at least 10 days prior to purchase, and that they failed to give purchasers an earnings claim document containing substantiation for the earnings claims they made.

The proposed consent order to settle the charges would require Lewis and Quartercall to fully comply with the provisions of the Franchise Rule, and would prohibit them from making unsubstantiated earnings claims or misrepresenting any other material aspects of a franchise or business opportunity. Lewis would be required to pay the $10,000 civil penalty within 10 days.

The consent order was filed on Dec. 28 in the U.S. District Court for the Eastern District of Virginia in Alexandria, Virginia, by the Department of Justice on behalf of the FTC. The Commission vote to authorize filing was 5- 0.

NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent orders have the force of law when signed by the judge.

Copies of the Project Telesweep Consumer Bulletin, other information about Project Telesweep, and the complaint and consent order in this case are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

 

(FTC File No. X950094)
(Civil action No. 95-935-A)

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