SEATTLE - July 20, 1998 -- Two Canadian telemarketers have agreed to cease all operations in the United States and pay $900,000 (Canadian) for allegedly using illegal and deceptive practices when selling foreign lottery tickets to U.S. citizens.
As part of a stipulated judgment, Final Round Services Limited and Golden Packages Limited, both of Vancouver, British Columbia, will pay the money to the Washington Attorney General's Office and the British Columbia Ministry of Attorney General for consumer restitution and legal fees.
Over $ 438,897 (U.S.) in restitution will be distributed to more than 2,700 U.S. consumers including seven from Washington, who were solicited to buy individual tickets or group shares in the Australian or Spanish lotteries.
“Telemarketers need to think again about breaking our laws and hiding behind the border,” said Attorney General Christine Gregoire. “Working with the Canadian government, we're cracking down on the growing problem of cross-border fraud.”
The victims, many of them elderly, were repeatedly called and harassed by the telemarketers. One 83 year old Houston, Texas woman bought more than $35,000 in lottery tickets in just a few months. United States consumers lured by the prospect of instant wealth spend an estimated $120 million a year on foreign lottery promotions.
“Many of the victims are especially vulnerable to persuasive and pushy sales people,” said Gregoire. “They are too trusting and end up being taken advantage of over and over again.”
The Washington AG lawsuit against the telemarketing companies and their owners Nuraldin Shareef Karim (also known as Dillon Sherif) and Nanda Duraisami was filed in Federal Court in Seattle in November 1997. The lawsuit charged the defendants failed to disclose that the sale of foreign lottery tickets in the United States is a crime.
The telemarketers also allegedly misrepresented the chances of winning; made false claims that the winnings were “tax free”; failed to disclose that only a small portion of the purchase price was actually used to buy tickets; and repeatedly called consumers who requested no further contact.
Shortly after the lawsuit was filed, the British Columbia Attorney General led a team from the Washington's AG's office, the Federal Trade Commission, and the Canadian police, which closed down the telemarketers' operation and seized its assets.
“What is important is that we are sending a strong signal that we will not put up with this type of unscrupulous activity on either side of the border,” said British Columbia Attorney General Ujjal Dosanjh.
Consumers who purchased tickets from the telemarketers will be directly contacted by Gregoire's office or their own state Attorney General's Office regarding their eligibility to receive reimbursement for their losses.
In addition to consumer restitution, the telemarketers will also pay $85,000 (Canadian) to the British Columbia AG and $108,000 (U.S.) to the Washington AG to cover legal costs and fees.