A telemarketer accused of bullying elderly consumers and tricking them into paying for medical alert devices they didn't want was ordered to pay $3.4 million by a federal judge, the Federal Trade Commission said on Thursday.
Jason Abraham, who the FTC described as a "repeat offender," and his Instant Response Systems, would call elderly people and put pressure on them to buy a medical alert service, the FTC said. They were told it would get them help in an emergency.
Often, though, the company would tell the consumer that they had already purchased the service and owed hundreds of dollars, the FTC said. The company would send made-up invoices and "medical alert pendants" to elderly consumers who hadn't ordered the service and then threaten them to try to get them pay.
The total charges for a lifetime monitoring deal were $1,128, or $128 plus $36 a month for a three-year service agreement.
Here's a script telemarketers would read if the consumer pushed back:
"It appears that you don't really want to protect yourself. Tragically, you'll only know how much you needed the system only after you're lying in a nursing home - and it's too late. . . .You seem intelligent, but only a very foolish person would reject this offer. But - what can I do?"
The company also was charged with illegally soliciting people whose phone numbers are listed on the national "Do Not Call" registry.
"Instant Response Systems lied to older people to get them to pay for medical alert systems they didn't order and didn't want," Jessica Rich, director of the FTC's Bureau of Consumer Protection said in a statement. "Their high-pressure, deceptive phone pitches were illegal, and they violated the do not call rules to boot."
The court judgment was based on the amount of "unjust gains" Abraham and his company were deemd to have collected through the scheme. That money, if retrieved, can be used to repay victims.
"There is no genuine dispute that [the] defendants, in letters and phone calls, made material misrepresentations that consumers ordered medical alert services and owed [Instant Response Systems] money when, in fact, they did not," U.S. District Judge I. Leo Glasser wrote in his order.