Another man tied to telemarketing that deceptively pitched “extended automobile warranties” has agreed to permanent bans from both industries and a $6.5 million judgment, the Federal Trade Commission said July 6.
The June settlement with Daniel Kole and his Kole Consulting Group wraps up the agency’s case against the American Vehicle Protection service contract telemarketing operation, the agency said. According to the FTC, the scheme bilked consumers out of more than $6 million.
Kole provided startup funds for American Vehicle Protection and reviewed and revised its telemarketing scripts, the FTC said in a February 2022 complaint.
“Kole and AVP blasted consumers with illegal calls and made bogus claims about bumper-to-bumper warranties,” FTC Bureau of Consumer Protection Director Samuel Levine said in a July 6 statement.
Kole and Kole Consulting are permanently barred from telemarketing anything and forbidden to promote or sell “extended automobile warranties and vehicle service agreements,” according to their June settlement with the FTC.
Neither defendant admitted nor denied any wrongdoing under the deal. Emails to attorneys for Kole and his company have not yet been returned.
In March, the FTC announced similar bans and a separate collective $6.5 million judgment as part of a settlement with Tony Gonzalez; his brother Charles Gonzalez; their service contract companies American Vehicle Protection and CG3 Solutions, which does business as My Protection Plan; and the Tony Gonzalez Consulting Group. Neither Gonzalez brother nor their companies denied or admitted any wrongdoing in that March settlement.
The monetary judgments were largely suspended in both the Kole and Gonzalez settlements.
Kole and his company must pay a combined $500,000 to the agency but can avoid the rest of the $6.5 million bill. The other settlement required Charles Gonzalez to pay $3,000 and Tony Gonzalez to hand over all funds from two bank accounts and the proceeds from selling Cartier and Breitling watches; the remainder of the judgment was stayed.
The FTC in a February 2022 complaint had accused Kole, the Gonzalezes and their companies of single counts of deceptive representations in violation of the Federal Trade Commission Act. The defendants also had faced single counts of violating the Telemarketing Sales Rule by misrepresenting an affiliation, misrepresenting characteristics of a good, misrepresenting a refund, remotely creating payments tied to telemarketing, calls violating the Do Not Call registry and failing to pay the registry’s fee.
According to the FTC, the defendants were tied to a scheme involving deceptively telemarketing vehicle service contracts to consumers — with such solicitations often made to numbers on the Do Not Call registry.
The FTC alleged telemarketing scripts failed to mention the actual vehicle protection company names and instead represented the caller as being from “dealer services” of the manufacturer or dealership associated with the customer’s car.
Interested consumers were transferred to “so-called specialists” in the motorist’s vehicle brand, who “make additional misrepresentations that AVP is affiliated with an automobile dealer or manufacturer, such as ‘I am from Ford,’ ” the FTC wrote in the complaint.
The service contracts sold contained many coverage exceptions, but customers were told the products featured “bumper-to-bumper coverage” or “full vehicle coverage,” the FTC said.
The sales pitch also promised a refund if the warranty was canceled in 30 days. But the defendants failed to provide these refunds when requested, did not return calls and messages and broke promises that refunds were coming, the FTC said.