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Marketers peddling a “Rapid Debt Reduction” program and false promises to reduce consumers’ credit card interest rates have been fined $1.5 million by the FTC. Under court order the principals have agreed to pay the fine in restitution for their debt relief scheme, which claimed interest rate reductions in exchange for an up-front fee of up to $899. The fines will go to refund defrauded consumers.
This FTC action is just one of several filed as part of a collaboration with law enforcement, known as “Operation Short Change.”
In this FTC complaint principals and affiliates of Mutual Consolidated Savings (MCS) used cold calls, pre-recorded “robocalls,” and the Internet to pitch a fictitious “Rapid Debt Reduction” program. This false debt relief program collected between $690 and $899 from consumers in exchange for promises to reduce credit card interest rates, save them thousands of dollars, and pay off their debt three to five times faster than current repayment plans.
In addition, the defendants allegedly broke numerous Do Not Call (DNC) and Telemarketing Sales Rules (TSR) including calls to consumers on the DNC, failing to honor request to stop calling, transmitting fake Caller ID information, failing to identify themselves on calls, and making illegal robocalls.
- The FTC settlement order includes the following conditions against the defendants:
- Bans the defendants from working in the debt relief industry
- Prohibits them from misleading consumers or helping anyone else mislead consumers about any material facts regarding goods or services they are selling
- Must comply with TSR and DNC rules
- Pay approximately $1.5 million (all available assets) to be distributed to injured consumers
- If the defendants have misrepresented their financial assets they will be ordered to pay the full $22.5 million of alleged consumer injury
Note: All FTC settlement orders are just that, settlements. They do not constitute an admission by the defendant of violating and laws.
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