Scummy Telemarketer Taken to Court

At the Federal Trade Commission’s request, a U.S. district court has temporarily shut down a Brooklyn, New York-based operation that allegedly used deception, threats, and intimidation to induce elderly consumers to pay for medical alert systems they neither ordered nor wanted.

ALERT
925-221-2319

In its complaint, the FTC charges that telemarketers for Instant Response Systems call elderly consumers – many of whom are in poor health and rely on others for help with managing their finances – and try to pressure them into buying a medical alert service that consists of a pendant that supposedly allows them to get help during emergencies.  In numerous instances, Instant Response Systems allegedly has falsely claimed during sales calls that consumers who did not order the medical alert service have, in fact, bought the service and owe the company money -- often hundreds of dollars. 

The company also allegedly has shipped bogus invoices and unordered medical alert pendants to consumers without their consent, has repeatedly threatened consumers with legal action in order to induce and coerce payment, and has subjected them to verbal abuse.  In addition, the FTC contends that Instant Response Systems has illegally made numerous unsolicited calls to consumers whose phone numbers are listed on the National Do Not Call Registry.

According to the FTC’s complaint, consumers who tried to contact the company to dispute the false charges or find out how to return unopened packages often were unable to reach anyone.  If they did reach a representative, they allegedly faced threats, verbal abuse, and demands that they pay for the product.

Based on this alleged conduct, the FTC charged the company and its principals with making illegal misrepresentations to consumers, violating the Telemarketing Sales Rule by calling phone numbers on the DNC Registry, and violating the Unordered Merchandise Statute by sending consumers pendants they did not order.

The defendants charged in the case are Instant Response Systems, LLC, also doing business as Response Systems, B.B. Mercantile, Ltd., Medical Alert Industrial, and Medical Alert Services; and Jason Abraham, also known as Yaakov Abraham, individually and as an officer of Instant Response Systems.  Abraham was previously sued by the FTC in 2003 for selling international “drivers’ licenses” and phony university diplomas.

The Commission vote approving the complaint was 5-0, with former Chairman Jon Leibowitz and former Commissioner J. Thomas Rosch participating.  It was filed under seal in the U.S. District Court for the Eastern District of New York, Brooklyn Division, on February 25, 2013, and the seal was lifted on March 7, 2013.

The FTC appreciates the assistance of the New York State Office of the Attorney General in helping to investigate and bring this case.

NOTE:  The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendant has actually violated the law.  The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:

Mitchell J. Katz,
Office of Public Affairs
202-326-2161

STAFF CONTACT:

Arturo DeCastro,
Bureau of Consumer Protection
202-326-2747

(FTC File No. 122-3041)
____________________________________________

Is this the headquarters of the medical alert telemarketer that's

been calling you? 1601 East 18th Street, Brooklyn, New York 11230 

(See the FTC Complaint against Janson Abraham aka Yaakov Abraham)

Four Whistleblowers Who Sounded the Alarm on Banks' Mortgage Shenanigans

by Cora Currier ProPublica,   March 15, 2012, 4:46 p.m.

Buried in the sweeping mortgage settlement with banks, for which final documents were filed this week, are five whistleblower cases that shed light on the litany of foreclosure abuses by the banks.

According to one suit, Bank of America allegedly passed on bad loans to the Federal Housing Authority. In another, the bank allegedly denied qualified homeowners access to HAMP, the government's loan modification program.

The suits were all settled as part of the overall $25 billion mortgage deal. They were filed under the False Claims Act, which provides incentives for whistleblowers to come forward in cases where someone has defrauded the government. Whistleblowers can net up to 25 percent of the total settlement from False Claims suits, and in some of these cases, the reward is in the millions.

Details are available for four of the cases; documents in a fifth, against JP Morgan Chase, have not yet been filed in Massachusetts. While the cases were settled as part of the overarching agreement, they still have to be accepted by the courts in which they were originally filed. In reaching the settlements, none of the banks admit or deny the lawsuits' allegations.

We've laid out the details of each case.

Countrywide Defrauded the FHA

Countrywide CEO Angelo Mozilo

Kyle Lagow worked at LandSafe, a contractor of Countrywide, which Bank of America bought in 2008. He brought a suit in 2009 alleging that the company systematically undermined the appraisals process for home loans in order to approve as many as possible.

The result was bad loans passed on to the FHA for insurance, while Countrywide was later able to file millions in claims from the FHA. (Read the complaint, which has plenty of juicy details.)

Lagow alleges that much of the appraisal staff were not properly trained, and that in many cases, the appraisal was being done by a developer, KB Homes, which had a stake in making sure the loans closed.

Countrywide pressured LandSafe to blacklist appraisers with whom KB Homes "had too many issues." (KB Homes did not respond to requests for comment.)

Lagow's complaints were ignored or challenged.

He also says that he was fired for bringing the issue to Countrywide executives. Lagow's suit was settled for $75 million, and was a component of the Federal Housing Authority's $1 billion settlement with Bank of America over FHA insurance. Documents detailing his cut of the $75 million haven't yet been filed. Bank of America did not respond to requests for comment.

Rampant Robosigning at Bank of America, Wells Fargo, JP Morgan and Citi
Lynn Szymoniak, a lawyer, was facing foreclosure in 2008 when she received what she believed were fake documents from her bank. She began an investigation and eventually filed another false claim suit against the country's four largest mortgage servicers.

Szymoniak's suit is still sealed, but she told 60 Minutes last year about a mystery woman, "Linda Green," who appeared to be the vice president of 20 different banks and whose signature varied on the thousands of mortgage documents she had supposedly signed. Szymoniak also discovered what she called a "sweatshop" company, Docx, which forged signatures on thousands of mortgage documents (The banks Szymoniak names told 60 Minutes that Docx was hired by subcontractors. The company has since been shut down).

Her suit settled for $95 million, and she will receive $18 million. JP Morgan Chase declined to comment, and Wells Fargo and Bank of America did not respond to our inquiries. A spokesman for Citi declined to respond to the specific allegations, but said that Citi "is making every effort to ensure that no foreclosure goes forward based on an inaccurate or defective affidavit."

JP Morgan Chase Hid Fees from Veterans Program

James "Jamie" Dimon, chief executive of J.P. Morgan Chase

Two employees at a Georgia mortgage broker alleged in a suit filed last summer that JP Morgan, along with Bank of America, Wells Fargo, and Citigroup, scammed a program that is supposed to make it easier for veterans to get loans. The banks hid fees that would have disqualified loans from the program, lumping them in with other items on the clients' bill, and then submitted fraudulent documents to the government for reimbursement under the veterans program:  Read their full complaint.

JP Morgan settled for $45 million dollars. The two whistleblowers, Victor Bibby and Brian Donnelly, told Reuters that they would together receive $11 million. They also said they would continue their case against the other banks. JP Morgan declined to comment.

Bank of America Cut Qualified Homeowners Out of HAMP

Bank of America CEO Brian Moynihan

Gregory Mackler worked at Urban Lending, a company contracted by Bank of America to handle HAMP requests. His suit, filed last summer, alleges that Bank of America actively sought to reduce the number of people who qualified for the government's loan modification program, HAMP, pushing instead the bank's (often less affordable) proprietary loan modifications. This approach saved Bank of America money, but cost homeowners. (Read the complaint.)

Mackler's complaint describes many ways that Bank of America, through Urban Lending, allegedly disqualified homeowners for HAMP.

Payments were intentionally processed incorrectly so that they would be deemed late.

Houses that were owner-occupied were declared not so by "drive-by" inspections.

In some instances, Countrywide started foreclosure proceedings on homeowners who had been told they were "under review" for HAMP modifications. (ProPublica has also detailed many similar instances.) And the customer advocates assigned to HAMP customers didn't have access to the information that they needed.

When Mackler raised concerns with Bank of America executives, the suit alleges, he was ignored or told that Bank of America was "not of course interested."

According to the suit, Mackler was fired "in retaliation" in March 2011. Bank of America also did not respond to our requests for comment.

The suit settled for $6.5 million, and Mackler's cut is not yet finalized.

Click to have a look at Bank of America's historical stock price.