FTC Settles with Globex Telecom in First VoIP Telemarketing Robocalls Case

The U.S. Federal Trade Commission has settled its first case against a Voice over Internet Protocol, or VoIP,  service provider for making illegal telemarketing robocalls. Robocalls and unwanted text messages are an ongoing problem for consumers.

The company charged in the case, Globex Telecom, Inc. and its affiliate Educare, have agreed to pay $1.9 million to the Federal Trade Commission and the state of Ohio to settle the case out of court, the FTC announced Sept. 22. The companies were charged in connection with a robocall campaign “that peddled bogus credit card interest rate relief, illegally charging consumers millions of dollars,” the FTC’s press release said.

The Globex case is the first that FTC officials have brought against a company for violating the federal Telephone Consumer Protection Act by means of a Voice over Internet Protocol (VoIP) service provider.

Overview of Charges Against Globex and Educare

Globex is accused of providing Educare Centre Services with the VoIP service it used to make robocalls to U.S. consumers to sell Educare’s credit card interest rate reduction services – services the FTC and Ohio Attorney General David Yost allege are a scam.

“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, was quoted as saying in the commission’s press release.

FTC and Ohio officials filed the lawsuit against Educare in U.S. District Court for the Western District of Texas 2019, then added Globex to the case later when they discovered the company’s role in furnishing the calling technology that enabled Educare’s actions.

The government claims Educare promised to substantially reduce the interest rates on consumers’ credit cards, and offered a 100% money back guarantee if the company failed to do so, but neither was true. When customers who signed up for the service asked for their money back, Educare often threatened to turn them over to collections agencies or to sue them, the lawsuit says. The company cheated its customers out of more than $11.5 million, according to the lawsuit.

What Makes Telemarketing Phone Calls Illegal?

The Telephone Consumer Protection Act, or TCPA, was passed by Congress in 1991. At that time, telemarketing had become a popular sales tool for businesses and an unpopular experience for most Americans who were particularly opposed to robocalling – meaning unsolicited automated phone calls using pre-recorded voice messages instead of live callers.

Federal lawmakers drafted legislation to limit the use of automatic telephone dialing systems, artificial or prerecorded voice messages. Today, that includes VoIP and text messages, too.

The law also requires businesses, organizations and others making telephone solicitations to maintain do-not-call lists and regulations under the law require them “to obtain prior express written consent from consumers before robocalling or texting them.”

What Is VoIP Service?

Voice over Internet Protocol, or VoIP, service enables users to make voice calls using a broadband Internet connection instead of a traditional, analog phone line. The technology is often referred to as “internet calling.”

According to the Federal Communications Commission, “VoIP services convert your voice into a digital signal that travels over the Internet. If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination.”

Settlement Details in Globex Telecom and Educare Case

Under the terms of the government’s settlement with Globex Telecom, the company will pay $1.95 million and is prohibited from hiring former CEO and President Mohammed Souheil, any of Souheil’s immediate family members and fellow defendants Charles Kharouf and Sam Madi of Educare.

Souheil and two other corporations under his control will be prohibited from participating in any telemarketing phone calls in the U.S., according to the settlement. Souheil is Canadian. He is also “subject to a monetary judgment of $7.5 million, which is largely suspended due to an inability to pay,” the settlement says.

In lieu of the total judgment, the FTC will accept $150,000 from Souheil, the commission’s press release said.

Globex and its subsidiaries are also required under the terms of the settlement to block its client’s suspicious calls, including those using “spoofing technology” to mimic local telephone numbers that often trick consumers into answering the phone, among other concessions.

Educare and its owners will also be prohibited from participating in any telemarketing robocalls “in the United States, from marketing debt relief products or services of any kind, and from using misrepresentations in the sale or marketing of any product or service,” the settlement says. The company is also subject to a $7.5 million monetary judgment, and its owners a $2.8 million judgment, both of which are being suspended for their inability to pay, the FTC said.

“If any of the defendants are found to have misrepresented their ability to pay, the full amounts of their judgments will be immediately due.”

The Globex Telecom and Educate Telemarketing Phone Calls Lawsuit is Federal Trade Commission, et al. v. Educare Services Centre Inc., et al., Case No. EP19-cv-0196 in the U.S. District Court for the Western District of Texas.

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If you were contacted on your cell phone by a company via an unsolicited text message (text spam) or prerecorded voice message (robocall), you may be eligible for compensation under the Telephone Consumer Protection Act.

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This article is not legal advice. It is presented
for informational purposes only.