FTC Cracks Whip on Cross-Border Telemarketing of Foreign Lottery Sales

Cross-border telemarketers who used hard-selling telemarketing tactics to persuade elderly U.S. consumers to invest in international lotteries have been ordered to close shop by a federal court.

Operating out of Toronto, the telemarketers convinced consumers to send amounts anywhere from $29 to thousands of dollars to enter lotteries on the guarantee of winning. This violated laws that banned the purchase and sale of foreign lottery tickets in the U.S.

“These telemarketers sold U.S. consumers Canadian lottery tickets at inflated prices and exaggerated the chances of winning,” said Jodie Bernstein, director of the Federal Trade Commission’s Bureau of Consumer Protection, in a prepared statement released yesterday. “But the people who hit the jackpot were the telemarketers, not the consumers who lost money investing in this scam.”

Judge George M. Marovich of the U.S. District Court for the Northern District of Illinois, Eastern Division, at the request of the FTC issued a preliminary injunction against Windermere Big Win International Inc., Marathon Award Center, and Sunshine Fortuity Inc. and their three principals.

The court also froze the U.S. assets of both the firms and the individuals and appointed a receiver, pending trial. The Department of Justice, at the behest of the FTC, successfully petitioned a Canadian court to similarly freeze the Canadian assets of the defendants till the case was resolved.

Senior citizens in the U.S. were told by these telemarketers that they were “practically guaranteed” to win the lottery. The telemarketers also claimed to be “registered” or “sponsored” by the Canadian government to sell lottery tickets, failing to reveal that it was illegal to peddle them to U.S. consumers.

“The high-pressure sales made by the corporate defendants included false claims and representations … corporate defendants [also] omitted to inform the consumers that only a small fraction of the monies paid by the consumers went toward the purchase of lottery tickets,” said Judge Marovich in his injunction ruling.

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