FTC Punishes Prepaid Phone Card, Internet Terminal Con Artists

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The Federal Trade Commission settled with seven companies and five individuals who used telemarketing campaigns and weekend sales seminars in hotels nationwide to scam investors of millions of dollars.

A $15 million judgment was delivered against the corporate defendants, whose few assets will be seized. Individual fines of the same amount were also levied.

The defendants were Internet Marketing Group Inc., OneSetPrice Inc., Lousiana corporation First Choice Terminal Inc., Arizona corporation First Choice Terminal Inc., B&C Ventures Inc., RPM Marketing Group Inc. and National Event Coordinators Inc.

Individual defendants were David G. Cutler, Cindy Austen Gannon, Paul D. Bonnallie, Tisa Christiana Spraul and Michael J. Hatch. They are based in Tennessee, Florida, Louisiana, Arizona and Nevada, respectively.

The individuals and companies were punished for deceptively marketing and selling business opportunities involving rechargeable, prepaid telephone cards and public access Internet terminals for $12,995 to almost $250,000.

The FTC alleged that the defendants made false and unsubstantiated earnings claims in their sales seminars and promotional materials. They also misrepresented consumers' rights to cancel their purchase agreements and receive refunds.

Also, the FTC alleged that the defendants failed to give their customers timely, complete and accurate disclosure statements and earnings claims documents as required by the law.

To top all that, the defendants were charged with illegally calling consumers listed on the national Do Not Call registry.

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