On Tuesday, the Federal Trade Commission (FTC) announced that it reached a $2.1 million settlement with Globex Telecom, Inc. and affiliate Educare Centre Services, who will pay the FTC $1.95 million and some named individuals to settle FTC and Ohio charges “that they facilitated a scheme that peddled bogus credit card interest rate relief, illegally charging consumers millions of dollars.” The FTC noted that this is its first consumer protection case against a Voice over Internet Protocol (VoIP) service provider.
Globex, according to the FTC and Ohio, allegedly provided Educare Centre Services “with the means to make calls to U.S. customers, including illegal robocalls, to market Educare’s phony credit card interest rate reduction services.” The companies were purportedly both controlled by Mohammed Souheil, the former CEO and president of Globex; he is a named defendant in the lawsuit alongside other named individuals and corporations. The FTC noted that “(a)ll the individuals named in this action are Canadian nationals and reside outside of the U.S.”
“Bombarding people with unwanted robocalls is illegal – and so is selling bogus credit card interest rate reduction services with an upfront fee,” Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, said. “We will continue to go after companies like Educare that target people using these unlawful practices, and VoIP service providers like Globex who knowingly help them violate the law.”
Globex Telecom will pay $1.95 million under the settlement; it and its subsidiaries will also be barred from hiring Souheil, his immediate family members, and other named defendants. Additionally, the defendants must “abide by client screening and monitoring provisions,” whereby Globex and its subsidiaries will not provide VoIP or related services “to clients who pay with stored value cards or cryptocurrency, or to clients who do not have a public-facing website or social media presence.” Under the agreement, Globex is required to screen and review all potential clients and to re-screen any existing clients that are subpoenaed by the government or for other investigation purposes. Moreover, Globex and its subsidiaries must “block any calls made by their clients that appear to come from certain suspicious phone numbers,” or calls that use spoofing techniques, and “terminate their relationship with any telemarketer or other high-risk client that receives three or more USTelecom Traceback Requests…or line carrier complaints in a 60-day period.”
Educare Centre Services along with related entities and individuals were sued for the alleged scheme. The settlement prohibits the defendants from participating in telemarketing in the U.S., marketing debt relief products or services, and using misrepresentation to sell or market its products or services. Defendants Educare, Sam Madi, and Charles Kharouf are subject to a $7.5 million judgment and defendants Tripletel and Wissam Jalil are subject to a $2.8 million judgment, all of which will be “largely suspended based on inability to pay.” However, “Educare and Madi will be required to forfeit all funds frozen in Educare bank accounts” and Tripletel and Jalil “will be required to forfeit all funds frozen in Tripletel’s bank account. The Commission added that if the defendants misrepresented their ability to pay, their full judgment amounts will be due immediately.
Mohammad Souheil and two other corporations that he controls will be banned from “participating in any telemarketing in the U.S. and from violating the Telemarketing Sales Rule (TSR).” Additionally, they will be barred from “marketing debt relief products or services” and from making “misrepresentations in the sale or marketing of any product or service.” The FTC stated that they, “collectively, are subject to a monetary judgment of $7.5 million, which is largely suspended due to an inability to pay,” but they are required to pay $150,000.”
The FTC voted 3-0-2; Commissioners Rebecca Kelly Slaughter and Christine S. Wilson were recorded as not participating. The stipulated orders are awaiting approval by presiding Judge Kathleen Cardone of the Western District of Texas.