Ariz. AG says consumers defrauded out of $6M
PHOENIX (Legal Newsline) - Arizona Attorney General Tom Horne announced said Wednesday that several Arizona telemarketing companies have defrauded consumers out of more than $6 million.
According to the complaint, which was filed in Maricopa County Superior Court, the companies started by defendant Christopher Lewallen went by the names Solid Ad Solutions, Solid Tech Solutions, E-Web Financial and Freedom Billing. The companies allegedly defrauded approximately 5,000 consumers since 2008.
"These defendants have been operating this scam since 2008, when the economic crisis became most acute," Horne said. "They were clearly preying on people, many of them elderly, who were facing desperate financial problems and cynically offering a program that appeared to help people earn more income, when it was in fact nothing but a fraudulent scam. Arizona consumers need to be extremely cautious about who they give their money to.
"If a deal sounds too good to be true, it usually is. That was certainly the case here."
The targets of the companies were consumers who had either previously purchased or filled out an information request regarding home-based business opportunities, Horne says. The defendants offered to set up consumers with an Internet "web-mall" where they could earn commissions on products bought through the "web-mall" or through ads placed on the website. The consumers were also promised a business coaching program that would show them how to operate the business successfully, Horne says.
The company allegedly promised a high rate of income and a "risk free" investment while charging the consumer anywhere from $99 to $499 in up-front costs. Once a consumer made the initial purchase, the companies allegedly used high-pressure sales techniques to sell other services at much higher costs, sometimes reaching more than $33,000 for web traffic and advertising. It is alleged that no consumer ever recouped his or her investment or made commissions nearing the amount invested.
The complaint alleges that the 11 defendants violated the Arizona Consumer Fraud Act and the Arizona Telephone Solicitations Act. The complaint asks the court to impose civil penalties for each defendant of up to $10,000 for each violation, and to bar the defendants from further telemarketing and provide restitution to the victims.