Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—M.D. Fla.: Settlements announced in FTC action challenging debt collection tactics, interest rate reduction claims, (Sep 10, 2013)

By Jeffrey May, J.D.

The FTC announced today that four individuals who allegedly participated in schemes involving phony debt collection calls and bogus interest-rate reduction claims have agreed to settle the agency’s 2012 charges that they violated the FTC Act and the Commission’s Telemarketing Sales Rule. Consent decrees with defendants Brett Fisher, Andre Keith Sanders, William Balsamo, and Dale Robinson were entered by the federal district court in Tampa, Florida, on September 5, 2013 (FTC v. Pro Credit Group, LLC, September 5, 2013, Scriven, M.).

According to the FTC, between January 2010 and August 2011, defendants Fisher and Sanders, as well as two defending companies—Pro Credit Group, LLC, and Sanders Legal Group P.A.—set up U.S.-based financial accounts for a call center operation based in India to unfairly collect payday loan debts from consumers who either did not owe them, or owed them to somebody else. The callers allegedly used threats, lies, and abusive tactics to collect debts from consumers who had previously applied for or received loans from online payday loan companies and had supplied sensitive personal financial information that later found its way into the hands of those involved with the scam. The FTC contended that Fisher and Sanders, an attorney, used Sanders Legal Group to process at least $5 million in payments from consumers.

The agency also alleged that all four of the individual defendants and five companies they controlled - Pro Credit Group, LLC, Sanders Law, P.A., Consumer Credit Group, LLC, My Success Track, LLC, and First Financial Asset Services, Inc. - misrepresented interest rate reduction services and violated the Telemarketing Sales Rule by allegedly charging consumers up-front fees for their service and failing to obtain written approval from consumers before sending them robocalls.

There are four separate consent decrees with the individual defendants. The consent decree with Sanders also covers Sanders Legal Group, and Sanders Law. The consent decree with Balsamo also covers defendant First Financial Asset Services. Defendants Pro Credit Group, Consumer Credit Group, and My Success Track are not parties to these settlements and are facing default judgments.

Fisher, the purported mastermind behind the schemes, was already bound by a 2010 consent decree resolving FTC allegations that he participated in a scam involving both advance-fee credit cards and bogus interest-rate reduction claims. The current settlement imposes a $25.3 million judgment against Fisher. The parties have agreed that the judgment will not be discharged as a result of Fisher’s pending bankruptcy filing. In addition, the consent decree prohibits Fisher from telemarketing, promoting financial goods and services, and debt collecting.

The other three settlements also require the defendants to surrender available assets to satisfy their monetary judgments. While the settlement with Sanders does not prevent him from practicing law, Sanders, Sanders Legal Group, and Sanders Law are prohibited from debt collection and telemarketing, with certain narrow exceptions. Robinson also is prohibited from engaging in telemarketing and providing debt relief services, under his settlement. Lastly, Balsamo and First Financial Asset Services are prohibited from providing debt relief services. They also are prohibited from making or helping others with making robocalls, making or helping others with making outbound sales calls unless they document and record them, and helping anyone outside the United States who telemarkets to U.S. consumers.

This is Case No. 8:12-cv-00586 (FTC File Nos. 122 3051 and X120037).

Attorneys: Korin Ewing Felix for FTC. Andrew Lustigman (Olshan Grundman Frome Rosenzweig & Wolosky, LLP) for Andre Keith Sanders, Sanders Legal Group, P.A., and Sanders Law P.A.

Companies: Pro Credit Group, LLC; Sanders Legal Group, P.A.; Sanders Law P.A., Consumer Credit Group, LLC; My Success Track, LLC; First Financial Asset Services, Inc.

Cases: ConsumerProtection FederalTradeCommissionNews FloridaNews