New England Biz Law Update
A federal judge in Boston has issued orders banning a Rhode Island home security installation company and its founder from telemarketing in partial resolution of a Federal Trade Commission complaint alleging the defendants directly and through their agents called more than a million consumers in Massachusetts whose numbers are on the National Do Not Call Registry.
On July 31, U.S. District Court Judge George A. O’Toole entered a stipulated final order that permanently bans Alliance Security Inc. from telemarketing. A preliminary injunction issued the same day bars Alliance’s founder and CEO, Jasit “Jay” Gotra, from telemarketing until the final resolution of the case against him.
A complaint filed by the FTC in March 2018 alleged Alliance and Gotra were repeat violators of the Telemarketing Sales Rule, which prohibits calls to numbers on the DNC Registry. Alliance and its employees allegedly made outbound calls to solicit the sale of its security systems and associated security monitoring services.
According to the FTC’s announcement of O’Toole’s orders, Gotra and Alliance — then known as Versatile Marketing Solutions, Inc. — settled similar allegations against them in a 2014 court order.
The 2018 complaint alleged that Alliance and Gotra never complied with the 2014 court order. Instead, Alliance and Gotra violated the TSR again by making one million additional illegal calls. The complaint also alleged that Alliance and Gotra obtained consumers’ credit scores without consumers’ knowledge or permission, and without having a permissible purpose, in violation of the Fair Credit Reporting Act.
The order against Alliance permanently bans the company from all telemarketing and from obtaining or using consumer credit reports without written authorization. It also prohibits Alliance from misrepresenting its affiliation or association with other alarm companies, and imposes a suspended $9,845,021 judgment against the company, based upon its inability to pay. The judgment will become due in full if it is later determined that Alliance misrepresented its financial condition to the commission.
According to the FTC, the preliminary injunction against Gotra protects consumers from his “abusive telemarketing and illegal credit inquiries” while the litigation is ongoing. According to the FTC, O’Toole has transferred the case to federal court in Rhode Island, where Gotra lives, and where the case will proceed against him.
According to the FTC, Alliance contracted with third-party telemarketers that made outbound calls pitching its products and services. In 2018, the FTC brought claims against two of the telemarketing firms and their owners for calling numbers on the DNC Registry.
In addition to claims for the DNC violations, the FTC also charged the telemarketers with violating the TSR by not identifying the seller in their calls. The FTC previously announced settlements with the third-party telemarketers, America LLC and Power Marketing, and their principals, Jessica Merrick and Kevin Klink.
