Canadian telemarketer order pay back $5.1 million in car-buying scheme

A Canadian telemarketer and his four companies were recently hit with a $5.1 million judgment for allegedly fooling American and Canadian consumers into giving up hundreds of dollars in a car buying scheme.

A federal court ordered the payment at the request of the Federal Trade Commission to reimburse the consumers. The court also permanently banned the defendants from telemarketing and payment processing.

Matthew J. Loewen  and his companies allegedly made false claims to consumers that the buyers were lined up to buy their cars and that they would get refunds if the cars weren’t sold.  The defendants reportedly used a series of ever-changing corporate names, including Auto Marketing Group, Secure Auto Sales, and Vehicle Stars.

According to the FTC complaint, the defendants called people who had listed their vehicles for sale on websites such as Craigslist or eBay and falsely claimed that they would put them in contact with a buyer–in exchange for a fee, typically $399. They often told consumers their cars were undervalued and the price difference would cover their fee. The defendants also offered $99 “refund insurance” that was supposed to reimburse the consumer’s initial fee if the vehicle didn’t sell in 90 days.

According to the U.S. District Court for the Western District of Washington, the defendants’ telemarketing operation violated the FTC Act and the FTC’s Telemarketing Sales Rule.  According to the court, promises to match consumers with car buyers was false and the impression the defendants gave of easily obtainable refunds was deceptive.

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1 Comment

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One response to “Canadian telemarketer order pay back $5.1 million in car-buying scheme

  1. Mark Burrows

    Why can’t people learn. There are somethings you can buy online and somethings you can not.
    First let’s deal with the issue at hand, telemarketers. Hang up on these people. If they are companies that you are doing business with, politely say no thank you and you are not interested and if they persist, then ask for them to slowly repeat their name and either put a supervisor on the line of provide information for a complaint. If none given, then send a complaint regardless to the company. If you word it in a way that you have been happy with their service for years, but were upset by their telemarketer, and were on the brink of closing the account feeling if it isn’t broken, why fix it, but now the comfort level has been compromised and offers from the competition do look appealing, it could be time for a change, you could be surprised by the attention you receive.
    My point being, you do NOT have to take any on the spot pressure or decisions over the phone unless you phone into a radio contest or something of that nature.
    Telemarketing is first a high pressure selling technique, and now has been a tool adopted for criminal activity. So, hang up if you don’t recognize the company as someone you are currently dealing with.
    Now in this case, these guys are buying from online sites, charging the seller a high fee of around $400. then sell them an insurance policy for about another $100. So, essentially, what you end up doing is paying around $500 and get to keep your piece of junk car. Now that is what I call a deal.
    Same advice I give to sellers that I give to buyers. Do not wheel and deal unless you are face to face with the customer cash accessible. Most would be foolish to bring cash with them, they would either go to a local ATM or carry with them traveler’s checks which they can redeem as much as they need for the final agreed price from a local bank if the seller chooses not to accept them.
    Buying or selling a used vehicle is not something you leave to a third party. Okay, sometimes putting your car on a local consignment lot that is well established is not a bad idea, you have to payout a chunk of the sale, but the plus side is these sale lots push for the most they can get, they are working for a commission of the sale, the higher the sale, the bigger the slice. Chance is you get more than expected. Not only that, they keep it looking clean and well maintained. Also, these lots generally have good insurance, something you should always check.
    Yet, we are a society that wants to do things by ourselves, but most of us are not gifted in even the basic techniques of salesmanship let alone the crafty trade of con artists.
    Unless you know 100% what you are getting into, never give money up front to anyone, because all you are doing is buying an expensive ticket to a bad show. Once you’ve seen it, there is no way you are getting your money back.
    Mark Burrows

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