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