Best Websites
Since
1998 BestWebsites.com.my features thousands of best websites
in many
categories of interest with descriptions/reviews given by leading
publications and webmasters.
Best Websites
Debt Management
Debt Management Telemarketers Settle FTC Charges
Defendants Will Pay Nearly $1 Million in Consumer Redress and
Penalties
June 15, 2006
A credit counseling service and related companies and individuals
have agreed to pay $926,754 to settle Federal Trade Commission charges
that they made false claims about their debt management program and
violated the FTC's Do Not Call Rule.
According to the FTC, Credit Foundation of America, Inc. (CFA), and
its associates sold debt management services nationwide through
unsolicited, recorded messages left on home telephones, falsely
claiming that consumers were pre-approved for a program to consolidate
their credit card debts to a single monthly payment at a much lower
interest rate.
When consumers responded to the calls, they were encouraged to
enroll in a debt management plan, regardless of their individual
circumstances. Many enrollees were not appropriate candidates for debt
management plans and lost the large enrollment fees the defendants
charged.
"When it comes to debt-related problems, a 'one-size fits all'
solution should raise a red flag," said Lydia Parnes, Director of the
FTC's Bureau of Consumer Protection. "Debt management programs work
best when they are tailored to consumers' particular circumstances."
In marketing its debt management program, CFA also intruded on the
privacy of millions of people who did not wish to be called. The FTC
says CFA solicited prospective clients primarily through auto-dialing
equipment that delivered recorded messages, placing more than three
million telemarketing calls each week.
Many of the consumers called had placed their names on the National
Do Not Call Registry. Others had futilely requested to be placed on
CFA's in-house do not call list.
According to the complaint, although CFA claimed to be exempt from
the do-not-call requirements of the FTC's Telemarketing Sales Rule (TSR)
because of its tax-exempt status with the Internal Revenue Service,
CFA mainly generated profits for related for-profit companies and
individuals. Therefore, it is subject to FTC jurisdiction and must
comply with the TSR, regardless of the form of its corporate
organization.
The complaint charges CFA with acting as part of a for-profit
enterprise to generate substantial revenue from the fees paid by
consumers, along with TTT Marketing Services, Inc., Sure Guard Credit
Corporation, Inc., Anthony P. Cara, Todd A. Rodriguez, and Walter F.
Villaume (CFA defendants).
The complaint also names CFA telemarketing agents Credit Defenders
of America, Inc., Credit Shelter of America, Inc., Robert Brown, and
Bryan E. Taylor. The complaint contends that the California-based
defendants misrepresented that consumers were pre-approved for
participation in a debt management plan with particular creditors or
were guaranteed acceptance in a debt management plan at a particular
interest rate or payment level by particular creditors.
It further states that the defendants misrepresented the benefits
that consumers would receive, including that the interest rates
consumers paid would be reduced to as low as zero percent; that the
consumers would receive debt management services before their next
credit billing cycle; and that the defendants' credit counselors would
provide consumers with individualized credit counseling.
According to the complaint, the CFA defendants violated the TSR by
calling consumers on the National Do Not Call Registry and by failing
to place consumers' names on in-house do not call lists when
requested. The complaint also maintains that they failed to pay for
access to the Registry.
To resolve the charges, CFA, TTT Marketing Services, Inc., Sure
Guard Credit Corporation, Inc., Anthony P. Cara, Todd A. Rodriguez,
and Walter F. Villaume agreed to pay $250,000 in civil penalties and
$606,754 in consumer redress.
Credit Defenders of America, Inc. and its owner, Robert Brown,
agreed to pay $70,000 in consumer redress. Credit Shelter of America,
Inc. and its owner, Bryan E. Taylor, agreed to a judgment of $102,540,
which has been suspended due to their inability to pay. It will be
imposed if they are found to have misrepresented their financial
condition.
Source: www.consumeraffairs.com
Best Websites Copyright ©
2006 BestWebsites.com.my a collection of Best
Websites |