FTC Bans Repeat Offender from Telemarketing

Two companies and their owner, who were charged with selling bogus bartender and mystery shopper certification programs, have now been banned for life from telemarketing. The owner also will pay $115,000 and turn over his Porsche convertible to settle the Federal Trade Commission’s charges. The owner, Stevan P. Todorovic, is a repeat-offender who also is under a court order from October 2001, following FTC charges that he deceptively sold auction information guides.

According to the FTC, the defendants placed “help wanted” ads in local newspapers seeking bartender trainees and mystery shoppers. When job-seekers responded to the advertisements, the defendants’ telemarketers represented that positions were available, but only for those consumers who had been “certified” by defendants as bartenders or mystery shoppers. The defendants led consumers to believe that upon being “certified,” they would receive concrete information on available job openings. Yet after charging consumers between $58.90 and $98.90 for their at-home certification programs, the defendants provided consumers with only general lists of potential employers that are available elsewhere at no cost. The listed employers often had never heard of the defendants and attached no significance whatsoever to their “certifications.”

In the previous case, the FTC had accused Todorovic of running a similar scheme. In that case, the FTC maintained that he had deceptively telemarketed auction guides, promising consumers unique information on what would be available at specific auctions, but delivering only general information on local auction houses, comparable to what consumers could find in the Yellow Pages. The order in the earlier case banned him from selling auction guides and also prohibited the deceptive practices alleged in the FTC’s complaint.

In addition to Todorovic, the order announced today also applies to American Bartending Institute, Inc. and Intuitive Logic, Inc., the corporations through which Todorovic operated his latest schemes. On November 18, 2005, the federal court hearing the case granted the FTC’s request for a preliminary injunction, banning the defendants from doing any telemarketing while the case was pending. The order announced today makes that telemarketing ban permanent. The remaining defendant in the case, Michael G. Harvey, previously settled the FTC’s charges. The final order against Harvey also includes a lifetime telemarketing ban.

In addition to the ban on telemarketing, Todorovic and his companies are prohibited from misrepresenting any material fact about any product they may sell. The order also prohibits each of the deceptive practices challenged by the FTC, including: billing consumers without authorization or in amounts greater than authorized, failing to disclose fully their refund conditions and shipping and handling fees, making false earnings claims, and “upselling”
third-party products to consumers without identifying the seller or that the purpose of the conversation is to make a sale.

The order also includes a $6,192,612 suspended judgment against the defendants. If they misrepresented their financial status, or Todorovic fails to pay the portion of the judgment that was not suspended, then the defendants will be responsible for the full amount.

The FTC received invaluable assistance in this matter from the Better Business Bureau (BBB) of the Tri-Counties, the BBB of the Southland, and the Santa Barbara Police Department.

The Commission vote to authorize staff to file the stipulated final order was 5-0. The stipulated final order for permanent injunction was filed in the U.S. District Court for the Central District of California on April 14, 2006.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the stipulated final judgment and order for permanent injunction areavailable from the FTC’s Web site at http://www.ftc.gov and from the FTC’s ConsumerResponse Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.