Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Federal District Court Shuts Down Debt Relief Operation Following FTC Complaint, (Dec 14, 2012)

The FTC on December 13 announced that the federal district court in Fort Lauderdale, Florida, has issued a restraining order halting a debt relief scheme pursuant to an FTC complaint (FTC v. Southeast Trust LLC, FTC File No. 1223079, Case No. 12-cv-62441). The order freezes assets of the debt relief company and its principal, grants access to the company’s premises, and provides for expedited discovery, among other relief.

The FTC’s complaint alleged that the operation would place robocalls to consumers claiming to be a non-profit organization that helped consumers with debt problems. The calls would allegedly promise single monthly payments with low interest rates, and that consumers would dispose of their debt in three to five years. The operation also advertised through websites including southeasttrust.com and thedebtschool.com.

The FTC alleged that, despite charging advance fees of $250 to $400, the company did not provide any services to consumers. Those responding to the calls or advertisements would be routed to telemarketers posing as “certified credit counselors,” who would ask consumers to provide sensitive information such as bank account numbers. The FTC alleged that the company would frequently debit the consumers’ accounts without their authorization.

The FTC alleged that the conduct of the company and its principal violated the FTC Act and the Commission’s Telemarketing Sales Rule. Its complaint seeks injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief.

News: ConsumerProtection FederalTradeCommissionNews