Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Alleged “Obama approved” debt relief scam temporarily shut down, (Aug 25, 2014)

By Greg Hammond, J.D.

The FTC has successfully obtained a temporary restraining order on parties doing business as American Bill Pay Organization and American Benefits Foundation, for allegedly charging consumers $900 to $1,100 in up-front fees for false “Obama Approved” debt relief and credit repair services (FTC v. American Bill Pay Organization, FTC File No. 132 3205, Case No. 1:14-cv-01414).

According to the FTC’s complaint, American Bill Pay and American Benefits Foundations—operating through websites www.americanbillpay.org and www.benefitsfoundation.org—purportedly offered consumers a program that would eliminate or reduce the balance of their unsecured or secured debts and improve their credit. The program allegedly claimed to administer a fictitious government assistant program that would pay “as much as $25,000 towards consumers’ debts.” In addition, the organizations claimed to be affiliated with federal government agencies and publicized the president’s support of the program. However, after consumers paid up-front fees of $900 to $1,100, their bills were frequently left unpaid by the organizations, and their credit ratings, scores, or limits were not improved. Further, consumers were frequently unable to contact the organizations after learning their bills were left unpaid. The Commission consequently filed suit, alleging violations of the FTC Act and the Credit Repair Organizations Act, and seeking preliminary injunctive relief, permanent injunction, and a monetary judgment.

Restraining order. The federal district court in Washington, D.C. granted the Commission’s motion for temporary restraining order on August 21. According to the order, the defendants are prohibited from representing that: (1) they or any other person will substantially reduce consumers’ debts or improve their credit ratings, scores, or limits; (2) they or any other person is affiliated with the United States government or any agency thereof; (3) the existence of any debt relief product or service or any credit repair service; or (4) any person is eligible or could qualify for any debt relief product or service, or any credit repair service. The defendants were further required to temporarily disable their websites, blog, Facebook webpage, and video, and to suspend their internet domain name registrations.

Companies: American Bill Pay Organization; American Benefits Foundation

News: ConsumerProtection FederalTradeCommissionNews