FTC Cracks Down on Robocallers


On April 2, 2012 the Federal Trade Commission (“FTC”) announced that a federal judge ordered defendant Cash Grant Institute to pay $30 million in civil penalties and to return $1.1 million in unlawful gains.  The FTC alleged that Cash Grant Institute violated the FTC Act and the Telemarketing Sales Rules.  The Court order includes a $20 million penalty against defendant Paul Navestad, which, according the FTC, is the largest single civil penalty ever in an FTC case.

According to the FTC’s announcement, a Decision and Order issued on March 23, 2012 by the U.S. District Court for the Western District of New York, found that the Defendants made more than 8 million robocalls to consumers, including millions of calls to people on the National Do Not Call Registry.  According to the FTC, the calls falsely claimed that cash grants were available to consumers from the government, private foundations and “wealthy individuals”.  The calls promised cash up to $25,000 to help consumers overcome financial problems.  According to its press release, the FTC says that it demonstrated to the court that, contrary to Defendants claims, government grant money does not exist for almost any purpose, and none of the defendants’ websites actually provide grants.

A robocall is an unsolicited computer-generated telephone call offering services to consumers.  KKBS represents consumers in cases involving violation of the FTC Act and telemarketing rules.  If you have been subjected to unsolicited robocalls or unsolicited text messages contact us for a free consultation.