American consumers won’t be getting any more telemarketing pitches from robocaller Fereidoun “Fred” Khalilian, under a settlement reached by the Federal Trade Commission. Khalilian has agreed to be permanently banned from the telemarketing business in order to settle FTC charges that he and his company allegedly used pre-recorded robocalls to sell consumers auto service contracts.
Khalilian and his company, The Dolce Group Worldwide, LLC, are the latest robocall operation shut down as part of the FTC’s crackdown on deceptive prerecorded calls. According to the FTC, the operation, doing business under the name My Car Solutions, conned consumers into paying thousands of dollars by leading them to believe that the company was affiliated with auto dealers and manufacturers, and that it was offering to sell them extended auto “warranties.”
Khalilian is well-known to the FTC as a result of a 2001 settlement that banned him from all travel-related telemarketing, and required him to pay $185,000 in consumer redress for making deceptive pitches for travel packages.
In June 2010 the FTC filed a new complaint against Khalilian, alleging that since 2009, he and his company marketed “extended” auto warranties by blasting consumers with pre-recorded robocalls. These calls warned people that their car warranties were about to expire and instructed them to “press one” to talk with a representative. Consumers were then transferred to telemarketers who said they were from the “service contract department,” and they would “verify” information about the consumers’ cars and “confirm” other information, including their zip code.
The telemarketers then transferred consumers to a “senior specialist” who allegedly made more misrepresentations. Only after consumers bought the supposed warranties did they discover that My Car Solutions was not affiliated with their car manufacturer, and that the contracts did not cover “the entire engine,” did not provide “bumper-to-bumper” coverage, and excluded certain “pre-existing conditions.” Consumers who tried to get their money back – typically between $1,300 and $2,485 per warranty – found it nearly impossible.
The court order settling the FTC’s charges bans Khalilian and The Dolce Group from telemarketing or helping others to telemarket, prohibits them from making any misrepresentations or omissions when selling any goods or services, and includes a monetary judgment of more than $4.2 million, the amount of consumer harm the operation caused. Under the order, Khalilian will satisfy part of the judgment by turning over corporate and personal property totaling approximately $50,000. The FTC is authorized to take action to collect the remainder of the outstanding judgment from the defendants. The settlement order contains additional provisions to ensure the defendants comply with its terms.
You can read the permanent injunction here.