William E. Kovacic
General Counsel
Gary D. Kennedy
Suite 2150
1999 Bryan Street
Dallas, Texas 75201
Okla. Bar No. 4961
(214) 979-9379 (voice)
(214) 953-3079 (facsimile)
Attorney for Plaintiff
Federal Trade Commission
UNITED
STATES DISTRICT COURT
DISTRICT OF ARIZONA
FEDERAL TRADE COMMISSION, Plaintiff,
v.
MILLENNIUM INDUSTRIES, INC., a
corporation, d/b/a PREMIER CONSUMER SERVICES and ANTHONY V. DEANGELIS,
individually and as an officer and director of the corporation,
Defendants.
Case No.
COMPLAINT FOR INJUNCTIVE AND OTHER
EQUITABLE RELIEF
Plaintiff Federal Trade Commission
("FTC" or "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 obtain permanent injunctive relief, rescission of contracts,
restitution, disgorgement, and other equitable relief for defendants'
deceptive acts or practices in violation of Section 5(a) of the FTC Act,
15 U.S.C. § 45(a), and the FTC's Trade Regulation Rule entitled
"Telemarketing Sales Rule," 16 C.F.R. Part 310.
JURISDICTION AND VENUE
2. Subject matter
jurisdiction is conferred upon this Court by 15 U.S.C. §§ 45(a), 53(b),
57b, 6102(c), and 6105(b) and 28 U.S.C. §§ 1331, 1337(a), and 1345.
3. Venue in the District of Arizona is
proper under 15 U.S.C. §§ 53(b) and 28 U.S.C. § 1391(b), (c),
and (d).
PLAINTIFF
4. Plaintiff Federal Trade Commission is
an independent agency of the United States Government created by statute.
15 U.S.C. § 41 et seq. The Commission enforces 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 ("TSR" or "the Rule"), 16 C.F.R.
Part 310, which prohibits deceptive or abusive telemarketing practices.
The Commission may initiate federal district court proceedings by its own
attorneys to enjoin violations of the FTC Act and the TSR and to secure
such equitable relief as may be appropriate in each case, including
restitution for injured consumers. 15 U.S.C. §§ 53(b), 57b and
6105(b).
DEFENDANTS
5. Defendant Millennium Industries, Inc.
("Millennium") is an Arizona corporation with its offices and principal
place of business located at 1345 East Main Street, #109, Mesa, Arizona
85203. Defendant Millennium transacts or has transacted business in the
District of Arizona. Millennium conducts business under the assumed name
Premier Consumer Services ("Premier").
6. Defendant Anthony V. DeAngelis is an
officer and director of defendant Millennium. At all times material to
this complaint, acting alone or in concert with others, he has formulated,
directed, controlled, or participated in the acts and practices set forth
in this complaint. He resides in and transacts or has transacted business
in the District of Arizona.
COMMERCE
7. At all times relevant
to this complaint, defendants have maintained a substantial course of
business in the offering for sale and sale, through telemarketing, of
credit card protection services, in or affecting commerce, as "commerce"
is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
DEFENDANTS' BUSINESS PRACTICES
8. Since at least
July, 2000, under their assumed name Premier, defendants have fraudulently
telemarketed credit card protection services to United States residents.
Defendants charge consumers a fee of $369 for their credit card protection
services.
9. To induce consumers to purchase credit
card protection services, defendants have misrepresented that they are
affiliated with, or are calling from or on behalf of, the consumers’
credit card issuing institutions.
10. Defendants have told consumers that
consumers’ credit card numbers are being stolen, and that consumers need
to purchase defendants’ credit card protection services because consumers
are not currently protected against unauthorized use of their credit card
accounts by such criminals. In numerous instances, defendants have claimed
that, if a consumer’s credit card number is stolen or misappropriated, a
consumer can be held liable for all unauthorized charges to the consumer’s
credit card account.
11. In numerous instances, defendants do
not disclose promptly, or in a clear and conspicuous manner, that the
purpose of the call is to sell the consumer the defendants' credit card
protection services.
12. Defendants have claimed that purchase
of their credit card protection services protects consumers from liability
for unauthorized credit card charges.
VIOLATIONS OF
SECTION 5 OF THE FTC ACT
13. Section 5(a) of the FTC Act, 15
U.S.C. § 45(a), prohibits deceptive acts and practices in or
affecting commerce.
COUNT I
14. In numerous instances, in connection
with the offering of credit card protection services to consumers, or in
the course of billing, attempting to collect, or collecting money from
consumers, defendants have made various representations, expressly or by
implication, including but not limited to the following:
a. Defendants are affiliated with, or are
calling from or on behalf of, a credit card issuing institution; or
b. If consumers do not purchase
defendants’ services, consumers will be held fully liable for any
unauthorized charges made to their credit card accounts.
15. In truth and in fact:
a. Defendants are not affiliated with, or
calling from or on behalf of, a credit card issuing institution; and
b. Under Section 226.12(b) of Regulation
Z, 12 C.F.R. § 226.12(b), and Section 133 of the Truth in Lending
Act, 15 U.S.C. § 1643, a consumer cannot be held liable for more
than $50 for any unauthorized charges to a credit card account.
16. Therefore, defendants’ representations,
as set forth in Paragraph 14, are false and misleading and constitute
deceptive acts or practices in violation of Section 5(a) of the FTC Act,
15 U.S.C. § 45(a).
THE FTC’S
TELEMARKETING SALES RULE
17. In the Telemarketing Act, 15 U.S.C.
§ 6101 et seq., Congress directed the Commission to prescribe
rules prohibiting deceptive and abusive 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.
18. Defendants are "sellers" or
"telemarketers" engaged in "telemarketing," as those terms are defined in
the Rule, 16 C.F.R. §§ 310.2(r), (t), and (u).
19. The Rule prohibits telemarketers and
sellers from misrepresenting any material aspect of the performance,
efficacy, nature, or central characteristics of the goods or services that
are the subject of the sales offer. 16 C.F.R. § 310.3(a)(2)(iii).
20. The Rule prohibits telemarketers and
sellers from "making a false or misleading statement to induce any person
to pay for goods or services." 16 C.F.R. § 310.3(a)(4).
21. The Rule also requires telemarketers
using outbound calls to disclose promptly in a clear and conspicuous
manner to the person receiving the call that the purpose of the call is to
sell goods or services. 16 C.F.R. § 310.4(d)(2).
22. 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 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).
VIOLATIONS
OF THE TELEMARKETING SALES RULE
COUNT II
23. In numerous instances, in connection
with the telemarketing of credit card protection services to consumers,
defendants have represented, directly or by implication, that if consumers
do not purchase defendants’ services, consumers can be held fully liable
for any unauthorized charges made to their credit card accounts.
24. In truth and in fact, under Section
226.12(b) of Regulation Z, 12 C.F.R. § 226.12(b), and Section 133 of
the Truth in Lending Act, 15 U.S.C. § 1643, a consumer cannot be
held liable for more than $50 for any unauthorized charges to a credit
card account.
25. Therefore, defendants’ representations,
as alleged in Paragraph 23, are deceptive telemarketing acts or practices
in violation of Section 310.3(a)(2)(iii) of the Telemarketing Sales Rule,
16 C.F.R. § 310.3(a)(2)(iii).
COUNT III
26. In numerous instances, in connection
with the telemarketing of credit card protection services to consumers, or
in the course of billing, attempting to collect, or collecting money from
consumers, defendants have represented, directly or by implication, that
defendants are affiliated with, or are calling from or on behalf of, a
credit card issuing institution.
27. In truth and in fact, defendants are
not affiliated with, or calling from or on behalf of, a credit card
issuing institution.
28. Therefore, defendants’ representations,
as alleged in Paragraph 26, constitute false or misleading statements to
induce a person to pay for goods or services, and are deceptive
telemarketing acts or practices in violation of Section 310.3(a)(4) of the
Rule, 16 C.F.R. § 310.3(a)(4).
COUNT IV
29. In numerous instances, in connection
with the telemarketing of credit card protection services, defendants have
failed to disclose promptly and in a clear and conspicuous manner that the
purpose of the telemarketing call is to sell goods or services, in
violation of Section 310.4(d)(2) of the of the Telemarketing Sales Rule,
16 C.F.R. § 310.4(d)(2).
CONSUMER INJURY
30. Consumers throughout the United
States have suffered and continue to suffer substantial monetary loss as a
result of defendants' unlawful acts or practices. In addition, defendants
have been unjustly enriched as a result of their unlawful practices.
Absent injunctive relief by this Court, the defendants are likely to
continue to injure consumers, reap unjust enrichment, and harm the public
interest.
THIS COURT'S POWER
TO GRANT RELIEF
31. 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.
32. 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),
authorize this Court to grant such relief as the Court finds necessary to
redress injury to consumers or other persons resulting from defendants’
violations of the Telemarketing Sales Rule, including the rescission and
reformation of contracts and the refund of monies.
33. This Court, in the exercise of its
equitable jurisdiction, may award other ancillary relief to remedy injury
caused by the defendants’ law violations.
PRAYER FOR RELIEF
WHEREFORE,
plaintiff the Federal Trade Commission, 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, requests that the Court:
a. Award plaintiff such preliminary
injunctive and ancillary relief as may be necessary to avert the
likelihood of consumer injury during the pendency of this action and to
preserve the possibility of effective final relief;
b. Permanently enjoin the defendants from
violating the FTC Act and the Telemarketing Sales Rule, as alleged
herein;
c. Award such relief as the Court finds
necessary to redress injury to consumers resulting from the defendants'
violations of the Telemarketing Sales Rule, and the FTC Act, including
but not limited to, rescission of contracts, the refund of monies paid,
and the disgorgement of ill-gotten monies; and
d. Award plaintiff the costs of bringing
this action and reasonable attorneys’ fees, as well as such other and
additional relief as the Court may determine to be just and proper.
Dated: _________________, 2001
Respectfully Submitted,
William E. Kovacic
General Counsel
___________________________
Gary D. Kennedy
Attorney for Plaintiff
Federal Trade Commission |
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