On November 30, 2016, the Federal Trade Commission (FTC) and the Florida Attorney General (AG) announced several settlements totaling approximately $27 million in an alleged fraudulent credit card debt reduction scheme. In a set of stipulated orders, all but one defendant agreed to monetary judgments, as well as bans on future telemarketing, selling debt relief services, and credit card processing. The FTC and Florida AG had brought suit in the U.S. District Court for the Middle District of Florida, alleging violations of the Federal Trade Commission Act, the Telemarketing Consumer Fraud and Abuse Prevention Act, the FTC’s Trade Regulation Rule, and the Florida Deceptive and Unfair Trade Practices Act.
According to the amended complaint, the defendants would call debt-laden consumers, promising to help reduce their interest rates and save them thousands. The defendants would charge an upfront fee averaging from $695 to $1,495, but would not fulfill those promises and refuse to refund the fee. Included among the defendants are the credit card processor for the scheme and its officers, who are alleged to have created shell companies to assist in laundering the money from the scheme.
If the court approves the settlement, the telemarketing companies and their principals will be permanently enjoined from all future telemarketing and selling debt relief products; and the credit card processor and its principals will be permanently enjoined from providing payment processing services. Previous coverage of this lawsuit from Enforcement Watch can be found here.