Phoenix – Arizona Attorney General Mark Brnovich announced today his office shut down a fake veterans charity that used aggressive telemarketing calls to scam seniors across the nation out of thousands of dollars. A Stipulated Consent Judgment dissolves three Phoenix telemarketing companies owned by Robert Foster - Happy Hands, LLC, Standing Tree, LLC, and Action Point, LLC (collectively “Defendants”). The Defendants used a telemarketing scheme to target vulnerable seniors suffering from Alzheimer’s disease and other memory-related disorders. The seniors were convinced to purchase household products for an 1,800% markup, claiming the surplus money paid would help disabled or disadvantaged veterans. None of the proceeds were used for charitable purposes.
“I was outraged after listening to some of the recorded telemarketing calls,” said Attorney General Mark Brnovich. “Some of these vulnerable seniors were charged outrageous amounts for common household products. On top of that, these scammers preyed upon people's kindness by falsely claiming the proceeds were going to help veterans.”
The Arizona Attorney General's Office plans to introduce legislation in the upcoming session that will help law enforcement crack down on telemarketing scammers.
According to the Stipulated Consent Judgment reached October 30, 2015, the Defendants admitted to violating the Arizona Consumer Fraud Act (“ACFA”), Arizona’s Telephone Solicitation Statute, failing to register with the Arizona Secretary of State as a telephone solicitor, and making telephone calls to consumers on the Federal Trade Commission’s National Do Not Call Registry (“DNC Registry”). The Defendants also admitted to failing to allow consumers to exercise their right to cancel, falsely misrepresenting that the solicitations were being conducted on behalf of a charitable organization, engaging in unfair debt collection practices, targeting senior citizens with Alzheimer’s disease and other memory-related disorders, and making numerous deceptive statements and misrepresentations in violation of the ACFA in the sale of household goods. Defendant Foster is prohibited from owning, operating, or managing an outbound telemarketing call center for two years.
On October 23, 2015, the Attorney General’s Office filed a lawsuit against the Defendants alleging telephone solicitors misrepresented that they were Veterans of the U.S. Armed Services, handicapped or disabled, and/or economically disadvantaged persons that would receive “help” through the consumer's purchase of the Defendants overpriced products. The Defendants marketed products such as light bulbs, trash bags, plastic food containers, multi-purpose cleaners, kitchen shears, kitchen towels, bed linens, candles, air fresheners, and gift certificates. Defendants purchased the inventory from retailers, then marked up the prices of the products they sold hundreds of time more than the cost at which they purchased them. For example, the Defendants sold 30-count standard-sized 15-gallon garbage bags for nearly $90 dollars, 100 quart-sized Ziploc bags for nearly $90 dollars, and a fruit cake for nearly $90 dollars after shipping and handling.
The settlement requires the Defendants to pay $30,800 in consumer restitution for consumers who already filed a complaint with the Arizona Attorney General’s Office and up to another $75,000 in consumer restitution for eligible consumer complaints filed with the Arizona Attorney General's Office before March 1, 2016.
The Defendants are also required to pay a $120,000 civil penalty and $12,420 for the State’s attorneys’ fees and investigative costs. Defendants are required to make monthly payments against the balance due. $90,000 of the civil penalty is suspended as long as the Defendants fully comply with the settlement and make the monthly payments.
- Copy of the Consent Judgment
You can reduce the number of unwanted sales calls you get by signing up for the National Do Not Call Registry ("Do Not Call List"). Register your home or mobile number on the Do Not Call List. Most legitimate companies don't call your number if it's on the Do Not Call List, and if a company is ignoring the Do Not Call List, there's a good chance it's a scam.
This case was handled by Assistant Attorney General Jordan Christensen.
If you believe you have been a victim of consumer fraud, please contact the Attorney General's Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at 1 (800) 352-8431. Consumers can also file complaints online by visiting the Arizona Attorney General’s website.
For a copy of the audio recordings or to speak to a victim's family member, media may contact Mia Garcia, Spokesperson and Director of Media Relations at (602) 339-5895 or Mia.Garcia@azag.gov.