A trio of individuals have been permanently banned from the debt relief industry and must forfeit assets to help pay off a partially suspended $17 million judgment as part of an enforcement action by the Federal Trade Commission, the agency announced yesterday.
The FTC filed a lawsuit back in December against the three individuals and a web of affiliated companies they operated, accusing of them of lying to consumers, mostly older individuals. The victims were told the credit card companies had been overcharging them or that creditors couldn’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.
“These scammers ripped off consumers trying to get out of debt, and we’re pleased with these court orders banning them from the industry,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, in a statement. “With credit card delinquencies surging, the FTC will continue to take aggressive action against those who prey on struggling consumers.”
Along with being banned from engaging or performing debt relief services, the defendants are also banned from participating in telemarketing, are prohibited from deceiving consumers, and must surrender assets — in the form of a number of bank accounts — to help satisfy a judgment of $17,486,080.