FTC Banned ~ Hope for Car Owners

For Your Information: 03/07/2013

Court Bans Auto Loan Modification Company from the Debt Relief Services Business

Acting on a Federal Trade Commission complaint, a federal court has banned a

Seal of the United States Federal Trade Commis...

California-based company from providing modification services for auto loans and for any other type of debt.  The court imposed a $362,388 default judgment against Hope for Car Owners, LLC, a company owned by Patrick Freeman.  In December 2012, Freeman settled charges with the FTC in connection with this allegedly fraudulent auto loan modification operation.

The FTC charged Freeman and Hope for Car Owners by falsely promising consumers that Hope for Car Owners could modify auto loans and stop cars from being repossessed.  In March 2012, the FTC alleged that Hope for Car Owners and Freeman unlawfully charged hundreds of dollars in up-front fees, and told the consumers to stop paying their auto lenders, which often left them in worse shape than when they began, and increased the risk that their vehicles would be repossessed.  The FTC also alleged that once the up-front fees were collected, the defendants did nothing to obtain the promised loan modifications while also denying requests for refunds.

In addition to the ban on loan modification services, the default judgment prohibits Hope for Car Owners from making misrepresentations about any other product or service.  It requires the company to back up any claims about the benefits, performance, or efficacy of any product or service, and destroy customer information it obtained in connection with the scheme.

A judge in the U.S. District Court for the Eastern District of California entered the default judgment against Hope for Car Owners on February 21, 2013.  The default judgment concludes the case against Hope for Car Owners.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

http://www.ftc.gov/os/caselist/1223021/index.shtm

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FTC Stops Construct Data Publishers

For Release: 03/20/2013

FTC Stops Foreign Operation That Scammed Many Small Businesses and Nonprofits Into Paying Millions of Dollars for Bogus Online Directory

At the Federal Trade Commission’s request, a federal judge has temporarily halted a

Seal of the United States Federal Trade Commis...

Slovakia-based operation that allegedly tricked small businesses and non-profits into collectively paying millions of dollars to be listed in an online directory in which they had no interest in being listed and for which they did not understand they would be charged.  The FTC is seeking to permanently halt the alleged scam and require the defendants to refund the fees.

According to the FTC, the defendants send mailings to retailers, home-based businesses, local associations, and others who attend trade shows.  The mailings mention a specific trade show or exhibition and are designed to appear as though they are merely asking the recipient to update and check the accuracy of information for the “exhibitors directory” for the named trade show or exhibition.

As alleged in the FTC’s complaint, the mailings include a form stating that the recipient’s basic information has been listed in the directory for free, and instructing them to confirm its accuracy or make corrections on the form.  The form falsely suggests that the parties have a preexisting business relationship and that the directory listing is related to the recipient’s participation in the named trade show or exhibition.  Many recipients do not notice a statement, buried in fine print at the bottom of the form, that by signing and returning the form they agree to pay the defendants $1,717 per year for three years.  Often, the person who returns the form is not even authorized to enter into contracts for their employer.

According to the complaint, long after the form is signed and returned and the defendants’ 10-day cancellation period has expired, the defendants send an invoice demanding payment of $1,717 to a Slovakian bank account.  Those who challenge the invoice are told the order cannot be canceled.  Late payment notices follow, with late fees added, and some organizations pay just to end the harassment.

The FTC’s complaint was filed against Construct Data Publishers a.s., also doing business as Fair Guide, Wolfgang Valvoda, and Susanne AnhornConstruct Data moved from Austria to Slovakia in 2008, after being sued by Austrian authorities for deceptive practices.  To settle the Austrian case, Construct Data agreed to stop soliciting businesses in the European Union.

The Commission vote authorizing the staff to file the complaint was 4-0.  The U.S. District Court for the Northern District of Illinois, Eastern Division, issued a temporary restraining order and asset freeze on March 15, 2013.

The FTC acknowledges the assistance of the United States Postal Inspection Service, the Attorney General’s Offices of California and Illinois, the Better Business Bureaus serving Central Ohio, Metropolitan New York, and Chicago and Northern Illinois, and the Canadian Anti-Fraud Centre.

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs

202-326-2674
 
STAFF CONTACT:
Guy G. Ward
Bureau of Consumer Protection
312-960-5612

FTC Suit Halts Bogus Health Insurance Scam

For Release: 06/14/2012

The Federal Trade Commission has halted a telemarketing scam that allegedly tricked consumers who were seeking affordable health insurance into buying worthless medical discount plans. Health Care One LLC and three affiliated companies agreed to settlements that will bar them from any healthcare-related enterprise and from selling goods or services related to healthcare. The settlements also prohibit the defendants from violating the Telemarketing Sales Rule and require them to turn over their ill-gotten gains.

The settlement orders with Health Care One:

  1. Americans4Healthcare Inc.,
  2. Elite Business Solutions, Inc.,
  3. Mile High Enterprise Inc.,

and their principals resolve a complaint filed by the FTC in August 2010 as part of an agency crackdown on scams targeting Americans without health insurance.

Health Care One and its affiliates allegedly deceived consumers by marketing medical discount plans as government-endorsed health insurance and claiming they would deliver substantial savings on consumers’ healthcare costs. According to the FTC’s complaint, filed in Central District of California, the companies also falsely claimed that their program was widely accepted by healthcare providers in consumers’ local communities. The Health Care One companies touted their services in television commercials and radio ads. They promised “100% satisfaction” and a money-back guarantee.

However, the FTC alleged that Health Care One’s discount plans were not insurance, were not widely accepted by healthcare providers, and did not provide the promised healthcare savings to consumers.

According to the FTC’s complaint, the companies did not inform consumers that their program was not health insurance until after consumers signed up for the program and paid hundreds of dollars in fees. Consumers who subsequently tried to cancel their enrollment found that the Health Care One companies made it difficult or impossible to obtain refunds.

Shortly after the FTC filed its complaint, the Court issued preliminary injunctions against each of the Health Care One companies to halt their deceptive practices pending trial.

The settlement orders announced today require the defendants to surrender assets including the proceeds from the sale of an Aston Martin, a Maserati, a yacht, and two motorcycles. The orders also prohibit the defendants from making misrepresentations in connection with the sale of any good or service, including falsely representing: that a program is insurance; affiliation with, or endorsement or sponsorship by, the federal government; that purchase of a good or service will result in substantial savings to consumers; any material aspect of the good or service; the total costs associated with the good or service; and any material refund and cancellation policies, including, but not limited to, the likelihood of a consumer obtaining a full or partial refund, or the circumstances in which a full or partial refund will be granted to the consumer. The orders also bar the defendants from violating the Telemarketing Sales Rule, which prohibits misrepresentations in telephone sales and the making of unsolicited automated telemarketing calls.

In addition to the companies, the defendants in the case are Michael Jay Ellman; Robert Daniel Freeman; and Bryan Matthew Loving.

NOTE: These stipulated orders are for settlement purposes only and do not constitute an admission by the defendants that the law has been violated. Stipulated orders have the force of law when signed and approved by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180
 
STAFF CONTACT:
Faye Chen Barnouw or Barbara Chun,
FTC Western Region – Los Angeles
310-824-4343

Security Credit Services, LLC, Settled FTC Charges

For Release: 03/26/2013

In Settlement with FTC, Debt Collectors Agree to Stop Deceiving Consumers and Pay Nearly $800,000

Consumers Allegedly Were Tricked into Paying Unnecessary Fees and Falsely Threatened with Legal Action

After allegedly misleading consumers into paying unnecessary fees and falsely threatening consumers with lawsuits, defendants in a debt collection operation have

Seal of the United States Federal Trade Commis...

agreed to settle Federal Trade Commission charges.

The FTC alleged in its complaint that the defendants – a debt buyer and a debt collection law firm, both based in Mississippi – violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone. According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee. The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay. A debt collector is prohibited by law from using false, deceptive, or misleading representations or tactics when collecting a debt.

Under the terms of the proposed settlement, the defendants will pay $799,958 in restitution for consumers. The defendants also are barred from making any misrepresentations when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

According to the complaint, debt buyer Security Credit Services, LLC, and Jacob Law Group, PLLC have worked together since 2006 to collect debts nationwide. Security Credit buys consumer debt accounts, and contracts with Jacob Law to collect on them. The complaint alleges that Jacob Law called and pressured consumers to immediately make payments on their debts by authorizing electronic checks or credit or debit card payments over the phone. Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online. Since 2008, the defendants have collected at least $799,958 in fees from consumers.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

For consumer information about dealing with debt collectors, see Debt Collection.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent decree was 4-0. The FTC filed the complaint in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 13, 2013, and has submitted the proposed consent decree to the court for approval.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The consent decree is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent decrees have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs

202-326-3707
STAFF CONTACT:
Dama J. Brown
FTC Southeast Region
404-656-1361

Jacob Law Group Settled With FTC

For Release: 03/26/2013

In Settlement with FTC, Debt Collectors Agree to Stop Deceiving Consumers and Pay Nearly $800,000

Consumers Allegedly Were Tricked into Paying Unnecessary Fees and Falsely Threatened with Legal Action

After allegedly misleading consumers into paying unnecessary fees and falsely threatening consumers with lawsuits, defendants in a debt collection operation have agreed to settle Federal Trade Commission charges.

The FTC alleged in its complaint that the defendants – a debt buyer and a debt collection law firm, both based in Mississippi – violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone.  According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee.  The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay.  A debt collector is prohibited by law from using false, deceptive, or misleading representations or tactics when collecting a debt.

Under the terms of the proposed settlement, the defendants will pay $799,958 in restitution for consumers.  The defendants also are barred from making any misrepresentations  when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

According to the complaint, debt buyer Security Credit Services, LLC, and Jacob Law Group, PLLC have worked together since 2006 to collect debts nationwide.  Security Credit buys consumer debt accounts, and contracts with Jacob Law to collect on them.  The complaint alleges that Jacob Law called and pressured consumers to immediately make payments on their debts by authorizing electronic checks or credit or debit card payments over the phone.  Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online.  Since 2008, the defendants have collected at least $799,958 in fees from consumers.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

For consumer information about dealing with debt collectors, see Debt Collection.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent decree was 4-0.  The FTC filed the complaint in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 13, 2013, and has submitted the proposed consent decree to the court for approval.

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendants have actually violated the law.  The consent decree is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated.  Consent decrees have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs

202-326-3707
 
STAFF CONTACT:
Dama J. Brown
FTC Southeast Region
404-656-1361

FTC Warns ~ www.tenancybureau.us

FTC Warns Data Brokers That Provide Tenant Rental Histories They May Be Subject to Fair Credit Reporting Act

The Federal Trade Commission has warned the operators of six websites that share information about consumers’ rental histories with landlords that they may be subject to the requirements of the Fair Credit Reporting Act (FCRA).

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

The letters inform the recipients that if they meet certain criteria, namely collecting information on tenants and their rental history and providing that information to landlords so they can make judgments about renting to those tenants, they are considered credit reporting agencies and are subject to certain legal requirements.

Among the requirements cited in the letter are the companies’ obligation to protect the privacy of tenants whose information they collect, including ensuring that those requesting information about tenants have a legitimate reason to acquire it.  The letter reminds the companies of their obligation to ensure that the information they provide is accurate, to give consumers a copy of the information about them on request, and to allow consumers to dispute information they believe is inaccurate.  The letters also note that the companies must notify landlords of their requirements if they use the data to deny housing to a tenant, and to notify the sources of their information of the requirement that they provide accurate information.

Companies receiving the letters are

  1. The BlueChip Group LLC  ~ http://www.donotrentto.com
  2. M & R Rental Properties – http://www.badtenantlistings.com
  3. The Landlord Protection Agency~ http://www.thelpa.com
  4. National Tenant Network ~ http://www.ntnonline.com
  5. 123 Rent Inc. ~ http://www.therentersblacklist.com
  6. Tenancy Bureau Inc. ~ http://www.tenancybureau.us

The letters state that the FTC has made no determination whether the companies have violated the law but encourages them to review their business practices to ensure that they comply with the FCRA.  The FTC acknowledges the assistance of the Privacy Rights Clearinghouse in this matter.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs

202-326-2181
 
STAFF CONTACT:
Tiffany George
Bureau of Consumer Protection
202-326-3040

FTC Warns ~ www.therentersblacklist.com

FTC Warns Data Brokers That Provide Tenant Rental Histories They May Be Subject to Fair Credit Reporting Act

The Federal Trade Commission has warned the operators of six websites that share information about consumers’ rental histories with landlords that they may be subject to the requirements of the Fair Credit Reporting Act (FCRA).

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

The letters inform the recipients that if they meet certain criteria, namely collecting information on tenants and their rental history and providing that information to landlords so they can make judgments about renting to those tenants, they are considered credit reporting agencies and are subject to certain legal requirements.

Among the requirements cited in the letter are the companies’ obligation to protect the privacy of tenants whose information they collect, including ensuring that those requesting information about tenants have a legitimate reason to acquire it.  The letter reminds the companies of their obligation to ensure that the information they provide is accurate, to give consumers a copy of the information about them on request, and to allow consumers to dispute information they believe is inaccurate.  The letters also note that the companies must notify landlords of their requirements if they use the data to deny housing to a tenant, and to notify the sources of their information of the requirement that they provide accurate information.

Companies receiving the letters are

  1. The BlueChip Group LLC  ~ http://www.donotrentto.com
  2. M & R Rental Properties – http://www.badtenantlistings.com
  3. The Landlord Protection Agency~ http://www.thelpa.com
  4. National Tenant Network ~ http://www.ntnonline.com
  5. 123 Rent Inc. ~ http://www.therentersblacklist.com
  6. Tenancy Bureau Inc. ~ http://www.tenancybureau.us

The letters state that the FTC has made no determination whether the companies have violated the law but encourages them to review their business practices to ensure that they comply with the FCRA.  The FTC acknowledges the assistance of the Privacy Rights Clearinghouse in this matter.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Jay Mayfield
Office of Public Affairs

202-326-2181
 
STAFF CONTACT:
Tiffany George
Bureau of Consumer Protection
202-326-3040