Attorney General's News Release

January 24, 2008

Telemarketer that made misleading robocalls to Missourians must honor state No Call list, pay $152,000 in order obtained by Nixon

Bolivar, Mo. — Attorney General Jay Nixon today obtained a consent judgment against a San Francisco company that gave false information to Missourians in telemarketing calls. The order signed by St. Louis City Circuit Judge John Garvey was issued against Telelytics (doing business as Debt Solutions) of San Francisco, its owner Scott Kaplan and four other defendants, and requires Telelytics and Kaplan to pay $152,000 to the state and stop calling consumers on the state No Call list.

Nixon says that although Telelytics primarily telemarkets political robocalls, the complaints filed by Missouri consumers were protesting Telelytic’s attempts to sell credit card consolidation and credit counseling services. Today’s court order requires the company to honor the state No Call list, and refrain from contacting Missouri consumers on the list, even if the telemarketing calls are presently exempt under Missouri law.

“It is extremely significant that, through today’s court order, a company that does the majority of its business in campaign robocalls has agreed, during a campaign season, to stop making these calls to Missourians on the No Call list, even though political robocalls are exempt from our state No Call law,” Nixon said.

Nixon previously obtained temporary restraining orders against Telelytics, along with Generations Direct and Vitelity Communications and their CEOs, in April, October and November of 2007. The April order was entered as a result of the defendants making telemarketing calls to Missourians on the No Call list, and the October order was due to allegations that the defendants were making fraudulent statements in those calls while attempting to make a sale. The court also issued an order in November freezing the assets of Telelytics.

Telelytics was making one million robocalls a week across the United States at one time, according to a deposition statement from Kaplan, but restraining orders forced them to stop calling Missourians on the No Call list. According to Nixon, the defendants used automated calls to contact Missouri consumers and then told those consumers, among other things, that they had been approved to consolidate their credit cards down to as low as 1.5 percent interest; that the consumers had already been approved by a “certified non-profit agency”; and that the consumer would be transferred to a “certified credit counselor right away.” Consumers were told to call a specific person, “Karyn McCarthy,” at an 800 number to receive more information. The Attorney General’s Office received 244 complaints regarding the calls.

Nixon says none of those statements made in the robocalls were true. Consumers who called back were eventually directed to representatives of a separate for-profit company who would then try to sell them identity theft insurance, debt consolidation and other services.

According to the judgment, defendants Telelytics and Scott Kaplan must comply with all state consumer protection laws, including possessing an updated No Call list at all times and not contacting any consumer whose name is on the list for political robocalls or other telemarketing calls. Telelytics and Scott Kaplan must also pay $152,000 to the state within five days of today’s filing of the judgment, and would be required to pay a civil penalty of $5,000 for any future violation of Missouri consumer protection laws.

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Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

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