FTC Shuts Down Two Scammers
NEW YORK ( MainStreet) The FTC announced earlier this week that it has shut down two fraudulent debt relief services. The defendants in both cases ran their operations by cold-calling consumers and offering to help lower interest rates and monthly payments on credit card bills without ever actually providing these services. Although unrelated, both scams worked in nearly identical ways.
"Essentially what they would do is they'd call consumers and promise them that for an up front fee they would be able to substantially reduce their interest rates, help pay off their debt faster," said Spencer Elg, an FTC attorney involved with the case against Innovative Wealth Builders.
Consumers would pay a fee, typically between $795 and $1,200 according to Elg. In return they got nothing, or next to it.
"Some consumers didn't get anything at all," Elg said. "Some consumers received an initial set of terms and conditions, and once they'd filled those out they got something called a financial plan. It was eight to 10 pages; basically it said that if you pay more, you pay off your debts faster and pay less interest over time."
Defendants in the second FTC case against Florida residents Brett Fisher and Andre Keith Sanders ran a largely identical scheme, although one that featured a robo-caller named Rachel to make the introduction.
"What he and his cohort were doing was promising consumers that they could lower their credit car interest rates and save thousands of dollars," said Korin Ewing Felix, an FTC attorney involved with the Fisher case. "Ultimately consumers paid hundreds of dollars for this. What they would get would be a package of documents and a budget plan that said 'if you start paying more than your monthly minimum, then you can pay your credit cards faster, then you won't ultimately pay as much.'"
"What they weren't getting," Ewing Felix added, "was lower interest rates. What they weren't getting were certified consultants. And what they certainly weren't getting were hassle free refunds."
In addition to his debt relief scam, Fisher also ran a fraudulent debt collection network. According to the FTC release, Fisher and his co-defendants used India based call centers to collect payday loans from consumers who either did not have such a loan or owed somebody else.
"The operation's callers used threats, lies, and abusive tactics to collect debts from consumers who had previously applied for or received loans from online payday loan companies," according to the press release. The defendants used information from those applications, acquired through undisclosed means, to target consumers.
"Once consumers agreed to pay, Fisher and attorney Sanders used Sanders Legal Group, P.A. to process at least $5 million from consumers whom the India-based callers had mislead."