The Federal Trade Commission (FTC) is taking action against Stratics Networks, a company that allegedly provided the technology for telemarketers to make tens of millions of illegal robocalls. The company’s services were used to promote offers for credit card and student debt relief, home buying, health insurance, cable TV discounts, and for telemarketers playing on concerns about the COVID-19 pandemic. The FTC has been cracking down on illegal robocalls in recent years, and this case is just one of many. Additionally, the FTC is suing debt relief companies that hired Stratics to make robocalls for their illegal debt relief services.
On February 16, 2023, the Department of Justice (DOJ) filed the complaint on behalf of the FTC, alleging that Stratics Networks enabled its clients to route and transmit millions of robocalls using VoIP technology. The company sold its wholesale SIP termination service to other VoIP technology service providers, including Netlatitude, Inc. and its owner Kurt Hannigan. Many of the robocalls made using Stratics’ technology were “ringless voicemails” (RVM), where the phone of the recipient does not ring, but they receive a voicemail with a robocall message. Stratics also sold access to this ringless platform. Netlatitude used Stratics’ wholesale SIP termination services to operate its own RVM service, which it then sold to a foreign telemarketer of debt relief services.
The complaint further alleges that Stratics’ customers, including lead generation telemarketers, used the company’s services to blast illegal robocalls to millions of consumers nationwide. The complaint outlines how Stratics continued to assist a California-based debt relief scheme despite receiving repeated notices from USTelecom’s Industry Traceback Group that some customers’ robocall traffic was likely illegal. The purported scheme included defendants Kasm and the related companies of Atlas Marketing Partners, Inc., Atlas Investment Ventures, LLC, Tek Ventures, LLC, doing business as Provident Solutions, and the companies’ owners.
Furthermore, the complaint alleges that this web of interconnected platform providers, lead generators, telemarketers, and debt relief service sellers violated the Telemarketing Sales Rule (TSR) in many ways, including making misrepresentations regarding debt relief services, assisting and facilitating violations of the TSR, initiating illegal pre-recorded telemarketing messages, and failing to make oral disclosures required by the TSR, among others.
On February 17, 2023, the FTC announced a proposed court order in the Stratics lawsuit, in which one set of defendants, Kasm and its owner, Kenan Azzeh, have agreed to settle the complaint in this case. The proposed court order, if approved by the court, would prohibit debt relief lead generator KASM from making the misrepresentations alleged in the complaint and from violating the TSR. It also requires the defendants to review the methods used by their existing lead generators, determine and obtain leads sold or offered to them illegally, and stop buying leads from any lead generator found to have sold them such leads. Finally, the proposed consent order imposes a $3.38 million judgment against the defendants, which will be partially suspended based on financial hardship, after they pay $7,500 to the FTC for consumer redress. If the defendants are later found to have misrepresented their financial hardship, the full amount will immediately become due.