On June 5, 2017, the Federal Trade Commission (FTC) announced that a federal district court had entered its eighth order against the remaining defendants in an illegal robocall ring in which defendants promised to help consumers lower their credit card interest rates.
The FTC, in conjunction with the Florida Office of the Attorney General (AG), filed a complaint against the defendants, both corporate entities and individuals, in June 2015 in the U.S. District Court for the Middle District of Florida. The Complaint alleged violations of the Federal Trade Commission Act, 15 U.S.C. §§ 53(b) and 57b, and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108, along with violations of similar Florida consumer protection statutes. According to the FTC and Florida AG, since at least August 2011, the defendants had used an automated telemarketing scheme to pitch credit card interest rate reduction services to thousands of consumers across the country. In several instances, the defendants allegedly claimed that they could obtain interest rates as low as 0% for consumers and could help save customers at least $2500.
Specifically, the Complaint alleged that the defendants violated federal law by, among other things, falsely representing to consumers that they were affiliated with consumers’ banking institutions, misrepresenting material facts regarding their credit card rate reduction services, and calling consumers listed on the FTC’s Do Not Call Registry. In exchange for the defendants’ “services,” the defendants allegedly collected personal consumer information, which in some cases defendants used to apply for new lower rate credit cards, charging upfront fees ranging from $300 to nearly $3500. The FTC and Florida AG claimed that, in most instances, the defendants failed to provide consumers with the promised “significant savings” and interest rate reductions.
A set of eight stipulated court orders settle the charges against each of the defendants, and all but one of the orders permanently bans the defendants from robocalling, telemarketing practices, and providing debt relief services. The orders, including two default judgments, also impose monetary judgments on each of the defendants, resulting in a total judgment of at least $4,890,797. Currently, the monetary judgments are partially or entirely suspended due to the defendants’ inability to pay.
Enforcement Watch reported on an action involving a similar debt relief scheme back in December 2016.