On January 8, 2016, the Federal Trade Commission (“FTC”) and the Attorney General for the State of Florida (“Florida AG”) announced charges against a payment processing business relating to an alleged nationwide debt relief telemarketing scam. The amended complaint was filed on December 21, 2015 in the United States District Court for the Middle District of Florida, Tampa Division. The complaint alleges that the defendants (three sets of companies and individuals) facilitated the processing of approximately $20 million in illegal upfront fees from consumers. It further alleges that consumers were defrauded by a telemarketing scheme that promised to reduce the consumers’ credit card interest rates. The FTC and Florida AG also allege that defendants arranged for at least 26 shell merchant accounts for the processing of credit card payments, thereby engaging in money laundering.
The FTC filed charges under sections 13(b) and 19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), 57(b), section 5(a) of the FTC Act, 15 U.S.C. § 45(a), provisions of the Telemarketing Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108, and the FTC’s Trade Regulation Rule (“Telemarketing Services Rule”, or “TSR”), 16 C.F.R. Part 310. The FTC is seeking injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief. The Florida AG seeks damages, injunctive relief, rescission, disgorgement, and other equitable relief under the Telemarketing Act, 15 U.S.C. § 6103(a) and the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”), Chapter 501, Part II, Florida Statutes (2015). All charges are related to the marketing and sale of debt relief services, and the alleged money laundering of the resulting proceeds.