$6.9 Million Judgment against NHS Systems Telemarketers

The Federal Trade Commission (“FTC”) recently won a judgment against the remaining defendants in a complaint originally filed as part of “Operation Tele-Phoney,” a 2008 crackdown on deceptive telemarketing. The complaint was amended in 2009, charging that the defendants used third-party telemarketers to unfairly and deceptively market and charge consumers for one or more discount health programs. The telemarketing corporation, NHS Systems, Inc., and five principals operating under a variety of names, were found to be in violation of the FTC Act and the Telemarketing Sales Rule (“TSR”). The FTC complaint against NHS Systems, Inc. and its principles alleged that the defendants called consumers and made numerous misrepresentations, often claiming to be affiliated with U.S. government agencies such as the Social Security Administration, IRS, or Medicare. The FTC charged that the defendants further deceived consumers, and tricked them into providing bank account information, by promising grants, tax refunds, tax rebates, or health benefits. Consumers were charged $29.95, $299.95, or both, and were enrolled in a supposedly free, "discount health care program" to which they never agreed and were charged $19.95 per month for membership.