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Debt Relief and Payment Processor Defendants Stipulate to Bans in FTC Settlements

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Pursuant to settlements with the Federal Trade Commission and the State of Florida, defendants alleged to have falsely promised to reduce consumers’ credit card interest rates will be banned from telemarketing and from selling debt relief services. The payment processors that allegedly enabled the operation will be banned from the payment processing industry.

The settlements resolve actions brought by the consumer protection agencies against the two groups of defendants in 2015 and 2016.

“Working with the Florida Attorney General’s office, the Federal Trade Commission has stopped yet another telemarketing scam that offered bogus solutions to relieve credit card debt,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

According to the agencies, the debt relief defendants phoned debt-laden consumers and represented that in exchange for an upfront fee – averaging from $695 to $1,495 – they would reduce consumers’ interest rate and save them thousands of dollars.

The agencies also allege that defendants, including the payment processors, arranged for at least 26 shell merchants to be used to process credit card payments. Respective charges brought against defendants include credit card laundering under the Telemarketing Sales Rule, illegal factoring of credit card transactions under Florida law, violation of the FTC Act and violation of the Florida Deceptive and Unfair Trade Practices Act.

The settlements resolve the charges against all but one defendant.

The stipulated orders can be seen here, here, here, here, here and here.

Respective terms include equitable monetary relief, surrender of frozen assets and various bans, such as selling debt relief services, from outbound telemarketing, from working in the payment processing industry, and from assisting others violate the FTC Act the TSR and the Florida Deceptive and Unfair Trade Practices Act.

The orders prohibit defendants from profiting from consumers’ personal information and failing to dispose of it properly.

Contact a Federal Trade Commission compliance and defense attorney if you are the subject of a regulatory enforcement investigation or action, or if you are interested in implementing preventative compliance measures.

HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.


Richard B. Newman is an advertising law and regulatory defense attorney at Hinch Newman LLP focusing on Internet marketing compliance and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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