Irvine company tricked consumers into providing personal information sold to telemarketers, FTC says

An Irvine-based company allegedly tricked hundreds of thousands of consumers into providing personal information that later was sold to telemarketers, federal regulators allege in a proposed $7 million settlement agreement that demands the activities cease.

The agreement would settle a Federal Trade Commission lawsuit filed last week in U.S. District Court against Response Tree LLC and its president, Derek Thomas Doherty. Under the agreement, Doherty would be banned from assisting in robocalls to phone numbers on the national Do Not Call Registry.

The proposed $7 million judgment would be suspended based on Response Tree and Doherty’s inability to pay. However, if the defendants are later found to have misrepresented their financial condition, the full amount of the judgment would be due immediately, according to the FTC.

The lawsuit alleges that, since at least 2019, Response Tree operated more than 50 websites designed to deceive consumers into providing their personal information for supposed mortgage refinancing loans and other services. That information later was sold as leads to telemarketers offering a multitude of products and services, including solar panels, hearing aids, auto warranties, and Social Security disability services, according to the FTC

As a result, Response Tree fueled millions of illegal telemarketing calls, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.

“The FTC will continue to target every corner of the illegal telemarketing ecosystem to protect consumers and hold wrongdoers accountable,” Levine said.

Doherty could not be immediately reached for comment on Wednesday, Jan. 10.

According to the lawsuit, Response Tree websites — including PatriotRefi.com, AbodeDefense.com and TheRetailRewards.com — actually were “consent farms” that used deceptive and manipulative “dark patterns” to induce consumers to provide their personal information, obscuring hard-to-find and inadequate disclosures about how the information would be used.

From January 2018 to May 2021, more than 85,000 outbound telephone calls were made to consumers based on the leads and purported consents obtained through just one Response Tree website, PatriotRefi.com, the suit states.

,The FTC says Irvine-based Response Tree LLC used several websites to dupe consumers into providing information sold to telemarketers (Photo from U.S. Court exhibit)Nearly all of the calls were robocalls and more than 55,000 of them were made to phone numbers on the National Do Not Call Registry, according to the FTC.

The PatriotRefi.com website allegedly duped consumers into providing their personal information under the guise of requesting a quote for a home mortgage refinance loan. According to the FTC, after consumers inputted their personal information and clicked a button labeled “GET YOUR FAST FREE QUOTE,” Response Tree captured the information and stored it in a database to sell to telemarketers and others.

Lead generation information collected from the PatriotRefi.com website and allegedly sold by Response Tree included the consumer’s name, address, phone number, email address, date of birth, IP address, and the date the consumer accessed or submitted their information.

Many or all of the consumers who provided their personal information to PatriotRefi.com never received home refinance quotes.

Additionally, Response Tree allegedly concealed key disclosures by presenting them in small text that was barely legible and hiding them behind hyperlinks.

According to the FTC, Response Tree at its peak had an average of 10,000 real-time leads available to sell each day and up to 50,000 leads on exceptional days.

The proposed settlement agreement is pending approval from the court.

Source: Orange County Register