The Federal Trade Commission has filed a lawsuit and obtained a temporary restraining order shutting down a network of eight companies engaged in a credit card debt relief scheme and the three individuals that own and operate them. The defendants are charged with violating the Telemarketing Sales Rule and unfair and deceptive acts or practices in violation of the FTC Act.
A copy of the complaint, filed against Acro Services, American Consumer Rights Organization, First Call Processing, Music City Ventures, Nashville Tennessee Ventures, Reliance Solutions, Thacker & Associates, Consumer Protection Resources, Sean Austin, John Steven Huffman, and John Preston Thompson can be accessed by clicking here.
The defendants are accused of telling “various lies” to consumers, namely older Americans, such as telling them the credit card companies have been overcharging them or that creditors can’t collect on the debts based on federal laws like the Fair Debt Collection Practices Act. In many cases, the consumers were told they may qualify for a debt relief program because the debts were never “validated.” The defendants convinced the consumers they could eliminate their debts within 18 months — after they pay a large upfront fee as high as $18,000 and continuing monthly charges. The defendants then told consumers they would never have to pay the upfront fee because it would be charged to the credit cards and would eventually be eliminated thanks to the program.
But consumers who enrolled in the program and stopped making payments on their debt ended up in worse positions than they were before they signed up, according to the complaint. Many of the debts were placed in collections and many consumers were sued for not making payments.
“These defendants preyed on older Americans already struggling with credit card debt and caused them to fall into even worse debt, with lasting harm to their credit,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “We will continue going after companies that take advantage of people in financial distress.”