Legal Articles

FTC Files Suit Against VoIP Service Provider and its Customers for Facilitating Illegal Debt Relief Campaigns.

On February 16th, the Federal Trade Commission (FTC) filed suit against Stratics Networks, Inc. (Stratics)

On February 16th, the Federal Trade Commission (FTC) filed suit against Stratics Networks, Inc. (Stratics) and several affiliated entities and individuals allegedly responsible for tens of millions of false and misleading robocalls and ringless voicemails advertising debt relief services.

According to the Complaint filed in the Southern District of California by the US Department of Justice on behalf of the FTC, Stratics’ outbound calling service enabled its clients to route and transmit millions of illegal robocalls and ringless voicemails (RVMs) using VoIP technology. The Complaint states that Stratics allegedly sold its wholesale SIP termination services service to other VoIP technology service providers, along with access to its platform for delivering RVMs.  Texas-based defendant Netlatitude, Inc. used Stratics’ wholesale SIP termination services to operate their own RVM service, which it then sold to a foreign telemarketer of debt relief services.

Other Stratics customers included lead generation companies that allegedly used its services to blast illegal robocalls to millions of consumers nationwide. Despite receiving repeated notices from USTelecom’s Industry Traceback Group that some customers’ robocall traffic was likely illegal, Stratics allegedly continued to assist those customers, including defendants Kasm, Inc., Atlas Marketing Partners, Inc., Atlas Investment Ventures, LLC; Tek Ventures, LLC, and their respective owners, all of which are accused of using Stratics’ RVM service to run an illegal campaign pitching debt relief services to consumers.

The Complaint further alleges that this “web of interconnected platform providers, lead generators, telemarketers, and debt relief service sellers” violated the Telemarketing Sales Rule (TSR) in multiple ways.

One set of defendants (Kasm, Inc. and the company’s owner, Kenan Azzeh) has already agreed to a settlement of the case against them which, if approved by the Court, would bar them from further TSR violations. The settling defendants would also be required to review the methods used by their existing lead vendors, identify any leads sold or offered to them illegally, and stop buying leads from any vendor found to have sold them such leads.

Finally, the proposed settlement imposes a $3.38 million judgment against the defendants, which will be partially suspended based on their inability to pay, after they pay the FTC $7,500 to be used for consumer redress. If they are later found to have misrepresented their financial condition, the full amount will immediately become due.

“This case targets the ecosystem of companies who perpetrate illegal telemarketing to cheat American consumers who are struggling financially,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take aggressive action to protect consumers from the scourge of illegal robocalls.”
“The Department of Justice is committed to stopping individuals and companies from making illegal robocalls and peddling predatory debt relief services,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to enforce the FTC Act and the Telemarketing Sales Rule against those who use misleading sales tactics to prey on consumers.”