$13 Million Robocall Scam Finally Thwarted
Life + Money

$13 Million Robocall Scam Finally Thwarted


A federal court has temporarily pulled the plug on a nationwide telemarketing operation that used illegal robocalls to trick seniors across the U.S. and Canada into buying medical alert devices they had not ordered. 

The prerecorded phone message (listen to the robocall) was cleverly produced so that it did not sound like a typical recording. In its lawsuit, the Federal Trade Commission said fraudulent robocalls told seniors they were about to be shipped a "free" alert system that had been purchased for them by a family member or friend. And not just any system; the recorded message falsely said it was a Life Alert—the original "I've fallen and can't get up" product advertised on TV. (Life Alert had nothing to do with this. In fact, it sued to have the robocalls stopped.)

Related:  More Older Americans Are Receiving High-Risk Medicine

The FTC received more than 67,000 complaints about this telemarketing campaign.

"These telemarketers used illegal robocalls to make a sales pitch that was 100 percent false," said Jessica Rich, director of the FTC's Bureau of Consumer Protection in a statement. "Their M.O. was to take advantage of older people's concerns about their health."

People who responded to the robocall pitch and pressed "1" on their phone were connected to a sales representative who allegedly continued the deception by providing false information about the monthly monitoring charge.

According to the FTC, customers were told the monthly monitoring fee would only be charged once the system was installed and activated. In reality, victims were charged $34.99 as soon as they agreed to receive the system, whether it was activated or not.

It's believed the companies that ran this marketing campaign took in more than $13 million in commissions since March 2012. Prosecutors said some people who responded to the bogus pitch suffered from dementia.

Related:  5 Surprising Ways to Help Prevent Dementia 

The court has frozen the assets of the fraudsters and Florida Attorney General Pam Bondi, who worked with the FTC on the case, said her office will do everything possible to compensate the thousands of people who lost their money.

"We will not tolerate unscrupulous individuals targeting the elderly," Bondi said.

Read more about the case on the FTC website. The FTC has a robocalls web page that has information about the ongoing problem.

This article originally appeared in CNBC.

Read more at CNBC:
Free service proves it can block pesky robocalls
Push is on to get 'kill switch' into smartphones
Scammers use 'Life Alert' name to swindle seniors