At the Federal Trade Commission’s request, a federal court has temporarily halted an alleged debt relief services scheme that targeted seniors, including veterans, using a wide range of deceptive conduct, including falsely impersonating consumers’ banks and credit card companies as well as government agencies.
The Commission filed a complaint against seven companies and three individuals operating the “Accelerated Debt” program that falsely claimed to reduce consumers’ debt by as much as 75% or more. The complaint also seeks monetary relief for consumers the companies defrauded.
“The defendants falsely posed as consumers’ banks and credit bureaus to mislead them into paying thousands of dollars for their supposed debt relief services,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “What makes this case especially egregious is the defendants’ targeting of older Americans and veterans. The Commission will continue to stop such illegal and unethical conduct.”
The Accelerated Debt defendants, acting as a common enterprise, operated a debt relief scam that took in an estimated $100 million, primarily targeting older consumers, some of whom are veterans, according to the complaint.
For example, in papers filed along with the complaint, the FTC noted that one consumer, an Army veteran, was $13,000 deeper in debt and saw his credit score plummet from the high 700s to the 500s because of the defendants’ actions. He almost lost the security clearance required for his job after the defendants told him to stop paying his credit cards, which then went into default.
Another consumer, a retired, disabled veteran, was forced to use his savings and retirement funds to repay the increased debt that he incurred as a result of the defendants’ actions and their unlawful advance fee of nearly $10,000.
The defendants contacted consumers through telemarketing calls or in response to inbound calls resulting from their direct mail and online ads. The FTC alleges the defendants engaged in multiple illegal activities, including:
- impersonating consumers’ banks or credit card issuers, the federal government, or a consumer reporting agency;
- making false promises that they could reduce consumer’s unsecured debts;
- collecting illegal advance fees from consumers;
- using prohibited remotely created checks;
- unlawfully obtaining consumers’ credit reports; and
- violating the FTC’s Do Not Call requirements by soliciting consumers seeking debt relief services through both inbound and outbound telemarketing.
Based on this conduct, the FTC alleges the defendants violated the FTC Act, the Telemarketing Sales Rule, the Impersonation Rule, and the Fair Credit Reporting Act. The complaint also alleges the defendants violated Section 521 of the Gramm-Leach-Bliley Act by making false statements to get consumers’ financial account numbers.
The Commission vote approving the filing of the complaint was 3-0. The FTC filed the complaint in the U.S. District Court for the District of Arizona against: Accelerated Debt Settlement, Inc.; ADS Resolve LLC; Financial Solutions Group LLC; Unified Capital Services LLC; Mediawerks; Resolution Specialists LLC; Futura Capital LLC; Jeffery A. Lakes; Robert Knechtel; and Elizabeth Reaney.
The staff attorneys on this matter are Gregory Ashe and Benjamin Cady in the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
Recent Comments