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A federal district court has ordered a temporary halt to an allegedly deceptive telemarketing scheme that preyed on elderly consumers. The Federal Trade Commission has charged SCAT -Senior Citizens Against Telemarketing -- a Las Vegas-based firm and its president, with operating a fraudulent "recovery room" and misrepresenting to consumers that they were affiliated with a government consumer protection agency and would, for a fee ranging from $200 to more than $1,000, recover money that the consumers had lost to other fraudulent telemarketers. This is the fourth Las Vegas-based recovery room sued by the FTC within the past year.

The FTC's complaint detailing the charges names USM Corporation, doing business as Senior Citizens Against Telemarketing and Scat Services; and its president, Anita Sowards.

According to the complaint, since at least November 1994, the defendants have made unsolicited telephone calls throughout the United States to victims of previous telemarketing scams. In these telephone calls, the defendants' salespeople identified themselves as working for Senior Citizens Against Telemarketing, or SCAT, which they identified as an organization that can recover money lost by persons to previous telemarketers. The SCAT salesperson tells the consumer that, for a fee of five or ten percent of what the consumer has lost, SCAT will initiate actions that will result in the recovery of money lost by the consumer. In the course of their business, the FTC charged, the defendants mispresented that SCAT:

  • recovers money that substantial numbers of consumershave previously lost to telemarketers;

  • has been successful in recovering money lost for a substantial number of their customers;

  • has a special relationship with government agencies such as the FTC and state Attorneys General that helps them get money back for victims of fraudulent telemarketing firms; and

  • initiates legal action on behalf of their customers.

The FTC alleged that these representations were false and deceptive.

In addition to imposing the temporary restraining order, the court has frozen the defendants' assets to preserve funds for consumer redress, and the FTC has asked the court to permanently halt the defendants' deceptive practices.

The Commission vote to authorize staff to file the complaint in federal court was 5-0. The complaint was filed in the U.S. District Court for the District of Nevada, in Las Vegas, on July 12 under seal. The seal was lifted on July 17. A hearing on the FTC's request for a preliminary injunction continuing the conduct prohibitions and asset freeze is scheduled for July 19.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.

The FTC has developed a free fact sheet that offers tips for consumers on protecting themselves from reloading and doublescamming frauds. Copies of the brochure, the FTC's complaint in this case, as well as other news releases announcing other FTC reloading and double-scamming cases 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 FTC news as it is announced, call the FTC's NewsPhone recording at 202326-2710. 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. 952 3185)

(Civil Action No. CV-S-95-00668-LDG (LRL))

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