Consumer Finance Insights
April 13, 2018

FTC and Florida State AG Settle with Debt Relief Scammers for Over $80 Million

On April 12, 2018, the Federal Trade Commission (FTC) announced proposed settlements with three marketers for illegal debt relief and loan services.

In May 2017, the FTC filed an action against the three marketers and eleven related corporate entities claiming that the defendants engaged in a wide-scale debt relief scheme in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and the Telemarketing Sales Rule, 16 C.F.R. Part 310 and Florida’s Deceptive and Unfair Trade Practice Act.  Specifically, the complaint alleged that the defendants falsely claimed to help consumers pay, settle, or dismiss consumers’ debts and improve their credit, and tricked consumers into paying hundreds to thousands of dollars to do so.  The scheme was alleged to have netted tens of millions of dollars since 2014.

The proposed settlement orders, here and here, subject the three marketers to a judgment of $85,326,648.45 with post-judgment interest, jointly and severally.  Judgment against one of the marketers requires him to surrender assets worth approximately $34 million, and judgments against the other two will be suspended in part due to their financial condition.  The settlements also prohibit the defendants from advertising, marketing, or offering for sale any credit repair, debt relief or any other financial products or services making unsubstantiated product or service claims, telemarketing, making misrepresentations relating to any product or service, and making unsubstantiated claims about any product or service.

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