UNITED STATES DISTRICT COURT
CIVIL ACTION NO. COMPLAINT FOR PERMANENT INJUNCTION Plaintiff, the Federal Trade Commission (“FTC” or “the Commission”), for its complaint alleges: 1. The FTC brings this action under Sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101 et seq., to secure permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for defendant’s deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the FTC’s Telemarketing Sales Rule, 16 C.F.R. Part 310. JURISDICTION AND VENUE 2. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331, 1337(a), and 1345, and 15 U.S.C. §§ 53(b), 57b, 6102(c), and 6105(b). 3. Venue in the United States District Court for the Northern District of Georgia is proper under 28 U.S.C. §§ 1391(b) and (c), and 15 U.S.C. § 53(b). PLAINTIFF 4. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C. §§ 41 et seq. The Commission is charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission also enforces the Telemarketing Sales Rule, 16 C.F.R. Part 310, which prohibits deceptive and abusive telemarketing acts or practices. The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act and violations of the Telemarketing Sales Rule, in order to secure such equitable relief as may be appropriate in each case, and to obtain consumer redress. 15 U.S.C. §§ 53(b), 57b, 6102(c) and 6105(b). DEFENDANT 5. Defendant, Arshad Wallace, doing business as Comtel Marketing & Management Systems, at all times material to this complaint, acting alone or in concert with others, has formulated, directed, controlled or participated in the acts and practices set forth in this complaint. Defendant resides and transacts or has transacted business in the Northern District of Georgia. COMMERCE 6. At all times relevant to this complaint, the defendant has maintained a substantial course of trade in telemarketing advance fee credit cards, in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. DEFENDANT’S COURSE OF CONDUCT 7. Since at least May 1996 and continuing until approximately August 1996, the defendant, in cooperation with others, engaged in the deceptive telemarketing of advance fee credit cards. 8. Acting as a telemarketer for a company known as SureCheK Systems, Inc. d/b/a Consumer Credit Corporation (“CCC”), defendant contacted consumers through unsolicited telephone calls and made, or caused to be made, the following representations:
9. In the course of numerous calls to consumers, the defendant obtained consumers’ bank account information and then provided such information to CCC who then debited the accounts of the consumers by means of demand drafts. 10. Numerous consumers whose bank accounts have been debited never received a credit card. VIOLATIONS OF SECTION 5 OF THE FTC ACT COUNT ONE 11. In numerous instances, in connection with telemarketing offers to provide credit cards to consumers for a fee, defendant has representated, expressly or by implication, that consumers will receive a credit card in return for the payment of a fee. 12. In truth and in fact, in numerous instances, consumers do not receive a credit card in return for payment of a fee. 13. Therefore, the representation set forth in Paragraph 11 is false and misleading and constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). VIOLATIONS OF THE TELEMARKETING SALES RULE 14. In the Telemarketing Act, 15 U.S.C. § 6101 et seq., Congress directed the FTC to prescribe rules prohibiting abusive and deceptive telemarketing acts or practices. On August 16, 1995, the Commission promulgated the Telemarketing Sales Rule, 16 C.F.R. Part 310. The Rule became effective on December 31, 1995. 15. Defendant is a “seller” or “telemarketer” engaged in “telemarketing,” as those terms are defined in the Telemarketing Sales Rule, 16 C.F.R. §§ 310.2 (r), (t) and (u). 16. The Telemarketing Sales Rule prohibits telemarketers and sellers from, inter alia, requesting or receiving payment of any fee or consideration in advance of obtaining or arranging an extension of credit when the seller or telemarketer has guaranteed or represented a high likelihood of success in obtaining or arranging an extension of credit. 16 C.F.R. § 310.4(a)(4). 17. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), violations of the Telemarketing Sales Rule constitute unfair or deceptive acts or practices in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). COUNT TWO 18. In numerous instances, in connection with telemarketing offers to obtain extensions of credit for consumers (i.e., the obtaining of major credit cards), the defendant has requested or received payments of fees in advance of obtaining such extensions of credit when defendant has guaranteed or represented a high likelihood of success in obtaining the extensions of credit for such consumers. 19. The defendant has thereby violated Section 310.4(a)(4) of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(a)(4). CONSUMER INJURY 20. Consumers throughout the United States have suffered and continue to suffer substantial monetary loss as a result of the defendant's unlawful acts or practices. In addition, the defendant has been unjustly enriched as a result of his unlawful acts or practices. Absent injunctive relief by this Court, the defendant is likely to continue to injure consumers, reap unjust enrichment, and harm the public interest. THIS COURT'S POWER TO GRANT RELIEF 21. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement, and restitution, to prevent and remedy any violations of any provision of law enforced by the Commission. 22. Section 19 of the FTC Act, 15 U.S.C. § 57b, and Section 6(b) of the Telemarketing Act, 15 U.S.C. § 6105(b) authorizes this Court to grant such relief as the Court finds necessary to redress injury to consumers or other persons resulting from defendant's violations of the Telemarketing Sales Rule, including the rescission or reformation of contracts, and the refund of money. 23. This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by the defendant's law violations. PRAYER FOR RELIEF WHEREFORE, plaintiff requests that this Court, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, Section 6(b) of the Telemarketing Act, 15 U.S.C. § 6105(b), and the Court’s own equitable powers:
Respectfully submitted, DEBRA A. VALENTINE ANTHONY E. DIRESTA ______________________________ ______________________________ |