Action Line: FTC targeting shady debt-relief companies
BY PHIL MULKINS World Action Line Editor
Tuesday, September 25, 2012
9/25/12 at 7:07 AM
Dear Action Line: I see the debt relief companies are still advertising on late-night cable TV. What's up with this? I thought they were all selling a bunch of hooey. - M.T., Tulsa.
At the Federal Trade Commission's request, the U.S. District Court for the Central District of California in Santa Ana halted a purported "debt relief" operation that allegedly contacted consumers through prerecorded telemarketing calls ("robocalls"), falsely claiming it could reduce unsecured debt 50 percent or more; made unauthorized charges to their bank accounts; and called phone numbers listed on the National Do Not Call Registry.
The court issued "temporary, preliminary and permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies and other equitable relief for the defendants' " illegal acts or practices.
The action is part of the FTC's efforts to stop scams targeting financially distressed consumers and its continuing crackdown on illegal "robocalls" tulsaworld.com/FTCDoNotRobocall The court ordered a stop to the defendants' allegedly deceptive practices and froze their assets pending a trial. The FTC has brought 88 enforcement actions against 250 corporate and 194 individual defendants involving robocalls and Do Not Call violations, resulting in payments of more than $69 million in civil penalties and equitable monetary relief.
"Giving people false hope by promising to reduce their debt is bad enough," said FTC Chairman Jon Leibowitz. "But stealing their money by debiting their bank accounts without their permission is beyond the pale. Consumers can count on the FTC and state attorneys general to find the bad actors and stop them from doing further harm." Ohio Attorney General Mike DeWine helped the FTC make its case as did the Better Business Bureau of the Southland. "The last thing people in debt need is being harassed by false promises of help for getting out of debt."
FTC's complaint against Jeremy R. Nelson and four companies he controlled (Nelson Gamble & Associates LLP, Jackson Hunter Morris & Knight LLC, Black Rock Professional Corp. and Mekhia Capital LLC), tulsaworld.com/FTCJRNdebtrelief accuses them of marketing and selling debt relief services via telemarketing and websites. They promised to settle consumers' debts for substantially less than they owed and said lawyers would provide the services.
One website cited in the complaint stated, "Nelson Gamble works with the utmost diligence to obtain the best possible outcome for our clients, with over $90 million of debt settled in the past 12 months - and over $800 million since our inception ... " noting that it employs "proven tactical methods to settle debt by 50 percent to 80 percent of your total outstanding balances. Typically, you can be debt free in three years."
According to the complaint, the defendants were not lawyers, as they claimed; they settled few, if any, debts for customers; and some consumers who did not order their services found the defendants had debited money from their bank accounts. FTC charged them with violating the FTC Act and the agency's Telemarketing Sales Rule by making false and deceptive claims and by causing consumers' bank accounts to be debited without their express, informed consent.
They also allegedly violated the rule by charging advance fees for debt relief services, calling phone numbers listed on the National Do Not Call Registry, calling consumers who had told them not to call, failing to transmit caller identification to consumers' caller ID service, delivering prerecorded messages without consumers' prior written consent, repeatedly calling consumers to annoy them, and delivering prerecorded messages that failed to identify the seller, the call's purpose, and the product or service. They allegedly violated the Electronic Fund Transfer Act and Regulation E by debiting consumers' bank accounts on a recurring basis without their written authorization, and without providing consumers copies of the authorizations.
Original Print Headline: FTC targeting debt-relief 'robocall' scams
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