Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Credit card debt relief scam halted, assets frozen, (Jul 7, 2015)

By Greg Hammond, J.D.

An alleged nationwide debt relief telemarketing scheme that has purportedly scammed millions of dollars from consumers has been halted by the federal district court in Tampa, pending resolution of deceptive marketing and false representation claims made by the FTC and the State of Florida (FTC v. E.M. Systems & Services, LLC, File No. 152 3155, Dkt. 8:15-cv-01417-SDM-EAJ).

The FTC and the Florida Attorney General, Pam Bondi, filed their complaint in June 2015, alleging that the defendants—through a web of entities and fictitious business names—operated a nationwide credit-card-interest-rate-reduction telemarketing scam. The defendants, consisting of six companies and three individuals, allegedly operated the scam by cold calling consumers with false promises that the defendants would reduce consumers’ interest rates on their credit cards, save them thousands of dollars in a short period of time, and refund consumers’ money if the promised savings were not realized. The defendants further charged an average fee of approximately $1,000 to consumers, but consumers mostly did not receive any debt relief at all. Instead, the complaint alleged that consumers acquired even more debt due to the fees the defendants charged.

The complaint set forth five claims: (1) deceptive marketing in violation of the FTC Act; (2) deceptive representations about debt relief services in violation of the Telephone Sales Rule; (3) deceptive representations about refunds in violation of the Telephone Sales Rule; (4) advance fees for debt relief services in violation of the Telephone Sales Rule; and (5) deceptive representations in violation of the Florida Deceptive and Unfair Trade Practices Act. The FTC and Florida Attorney General are seeking preliminary and permanent injunctive relief; relief to redress injury to consumers, including rescission or reformation of contracts, restitution, refunds, and disgorgement of ill-gotten monies; and costs of bringing suit.

“The joint efforts of my office and the FTC have stopped these scammers that stole millions of dollars from consumers through debt relief telemarketing scams, deliberately taking advantage of their trust and their financial struggles,” stated Florida Attorney General Pam Bondi. “I applaud the partnership of my office and the FTC for its great work in protecting consumers.”

Companies: E.M. Systems & Services, LLC

News: ConsumerProtection FederalTradeCommissionNews