FTC Freezes $2 Million in Atlanta Job Services Case

The Federal Trade Commission said today that it has been able to freeze more than $2 million in corporate and individual assets pursuant to a preliminary injunction the agency had won in federal district court on June 21 against Atlanta-based Career Information Services, Inc., its successor, CIS Associates, Inc., and two corporate officers, David Lee Smith and William Phillips.

The FTC had charged these defendants with running a deceptive job services scheme that started with the placement of classified ads for what appeared to be specific and currently available postal service and goverment jobs with wages in excess of $20 an hour. The ads appeared in newspapers with both local and national distribution. Consumers who called the 800 number in the ads were directed to call a 900 number to apply for a job, but were not told about the $34.95 charge for placing the 900-number call, the FTC charged. Moreover, the FTC alleged, instead of giving consumers the opportunity to apply for a job, the pay-per-call services only instructed consumers to write for what turned out to be a general information package with little or no information about particular job openings.

Following a hearing on June 19 in Atlanta, Federal District Court Judge Orinda D. Evans issued a preliminary injunction that, pending the outcome of the trial in this case, prohibits the defendants from making any false or misleading statement in connection with providing employment advisory services, including the specific types of statements challenged by the FTC. The preliminary order also requires the defendants to disclose the cost of any pay-per-call service they offer as well as certain other information in the ads for the service, as required by the FTC’s 900 Number Rule.

In addition, the judge’s order includes an asset freeze and it is pursuant to that provision that the FTC has been able to freeze more than $2 million of the defendants’ assets for possible refunds to consumers who called their 900 numbers. A trial on the case will be scheduled soon.

At the time it filed charges in this and six other cases, the FTC also announced a major consumer education campaign that includes a new consumer brochure titled “Help Wanted . . . Finding a Job.” The brochure warns consumers that job locator firms are placing ads for what look to be specific positions, but then charging consumers up front fees ranging into the hundreds of dollars and doing very little to help them. Few, if any, consumers ever receive the type of job placement assistance promised by such scam artists, the FTC said, adding that the vast majority of consumers never see their money again. Work before you pay, the FTC said, cautioning consumers to be skeptical of any job placement service that guarantees you a job for an up-front fee.

Copies of the preliminary injunction in this case, as well as the Commission’s complaint and the news release the FTC issued when it first announced the charges on June 20, 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 202-326-2502. 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. 962 3205)

(U.S. District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1-96-CV-1464-ODE)