Alert January 10, 2013

FTC Obtains TRO Against Debt Relief Company

The FTC announced that it has obtained a temporary restraining order against a debt relief operation that allegedly charged financially distressed consumers hundreds of dollars based on false claims that it could obtain consolidation rates as low as zero percent. The FTC charged the debt relief operation with multiple violations of the FTC Act for misrepresentations to consumers, as well as for violations of the Telemarketing Sales Rule for (1) charging fees prior to providing any debt relief; (2) calling consumers listed on the Do Not Call Registry; (3) misrepresenting their identity, the purpose of the calls, and the nature of the goods and services being sold; and (4) making illegal robocalls. The TRO prevents the debt relief operation from collecting any fees for its product or services and requires the operation to disable its website.