FTC Sends Strong Signal to VoIP Providers: Facilitating Illegal Telemarketing Calls Can Result in Steep Consequences

  • The Federal Trade Commission (“FTC”) and Ohio AG Dave Yost reached a settlement with Educare Centre Services, Inc. (“Educare”), voice-over-internet-protocol (“VoIP”) provider Globex Telecom, Inc. (“Globex”) and associated companies and individuals (collectively “Defendants”) to resolve allegations that Globex facilitated calls, including illegal robocalls, that promoted Educare’s alleged credit card interest reduction scam in violation of the FTC Act, the Telemarketing Sales Rule, and Ohio’s Consumer Sales Practices Act and Telephone Solicitation Sales Act.
  • The complaint alleged that Educare, which was controlled by Mohammed Souheil, Globex’s former CEO and President, used Globex’s services to make illegal robocalls to U.S. consumers to market Educare’s fraudulent credit card interest rate reduction services, and that Globex knew, or consciously avoided knowing, about Educare’s illegal activities.
  • Under the terms of the settlements with the Defendants, among other things, Globex and a subsidiary will pay $1.95 million to the FTC, Souheil and two companies under his control are collectively subject to a $7.5 million judgment, largely suspended for inability to pay, and the rest of the defendants, including Educare, are collectively subject to judgments totaling $10.3 million, largely suspended for inability to pay. In addition, the non-Globex defendants will be banned from participating in any telemarketing activities in the United States and from marketing debt relief products or services.