FTC Extends its Crackdown on Subscription Scam That Fleeced Consumers and Harassed Them Over the Phone


The Federal Trade Commission today resolved an action against the purveyor of a subscription scam called Publishers Business Services and its officers, Brenda Dantuma Schang, Dries Dantuma, Dirk Dantuma, and Jeffrey Dantuma, obtaining a court order that holds them accountable for the deceptive telemarketing scheme they used to fleece consumers and harass them over the phone. The order also imposes a suspended $14.47 million penalty.

“The FTC shut down this subscription scam years ago, and today we’re obtaining a permanent order holding its ringleaders accountable,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We won’t back down from challenging firms that use tricks, traps, or threats when selling subscriptions or anything else.”

As alleged in the Commission’s 2008 complaint, which was filed as part of an enforcement sweep, The defendants called consumers pretending to conduct a survey. At the end of the survey, they allegedly offered “free” or low-cost magazine subscriptions. Weeks later they sent consumers a bill falsely stating they agreed to pay several hundred dollars for the magazine subscriptions. The defendants made cancelling very difficult and harassed consumers who refused to pay the exorbitant bills, including by threatening to initiate collection actions or threatening to submit derogatory information about them to the major credit bureaus.

Enforcement Action

The proposed order announced today follows a permanent injunction entered against the Publishers Business Services in 2010 that shuttered their operations. That order remains in place today and prohibits them from committing similar wrongdoing in the future. Provisions of the new order include:

  • Monetary judgment. The order imposes a suspended judgment of $14.47 million against the defendants and requires them to give up all claims to money already paid to the Commission in this case; and
  • Potential contempt remedies for any future violations. The defendants are required to monitor their compliance with the proposed order and may face significant contempt remedies if they violate its terms.

The Commission’s original monetary relief in this action was vacated following the Supreme Court’s decision in AMG Capital Management LLC v. FTC, which would have resulted in a monetary windfall to the alleged scammers behind Publishers Business Services. The FTC’s settlement of this matter for a suspended judgment of $14.47 million, after originally having been awarded $24 million at trial, demonstrates the challenges since the Supreme Court’s AMG decision.

The Commission vote approving the stipulated final order was 4-0-1, with Commissioner Alvaro M. Bedoya not participating. The FTC filed the proposed order in the U.S. District Court for the District of Nevada.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

 

The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.



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