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    Edelman, Combs, Latturner, & Goodwin, LLC

    20 South Clark Street
    Suite 1500
    Chicago, IL 60603

    info@edcombs.com
    Phone: 312-739-4200
    Fax: 312-419-0379


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    Archive

    NetSpend Settles FTC Charges

    Friday, March 31st, 2017

    NetSpend Corporation has agreed to settle Federal Trade Commission allegations that the prepaid card company deceived people about access to funds deposited on NetSpend debit cards.

    The Commission vote approving the stipulated final order was 2-1, with Acting Chairman Ohlhausen dissenting and issuing a statement. Commissioner McSweeny also issued a statement. On March 31, 2017, the Commission filed a stipulation requesting entry of the order in the United States District Court for the Northern District of Georgia.

    NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge. Then-Commissioner (and former Chairwoman) Edith Ramirez registered a vote in the affirmative for the motion to approve this settlement before she left the Commission.

    Old debts

    Wednesday, March 29th, 2017

    Please contact us if you are in Illinois or Indiana and a debt collector or debt buyer is trying to collect an old debt from you (more than 4 years on a contract for the sale of goods, such as a car, more than 5 years on a credit card in Illinois, more than 6 years on a credit card in Indiana).

    FTC Settlement Halts Allegedly Abusive Practices by Company Collecting Debts for More Than 500 Municipalities

    Friday, March 24th, 2017

    FTC Settlement Halts Allegedly Abusive Practices by Company Collecting Debts for More Than 500 Municipalities

    An operation that collects debts owed to municipalities has agreed to stop engaging in allegedly illegal collection tactics under a settlement with the Federal Trade Commission.

    According to the FTC, American Municipal Services Corporation and its owners, Lawrence Bergman and Gregory Pitchford, collect court fines, parking tickets, and debts for utility bills and other services on behalf of more than 500 municipalities in various states, including Alabama, Arkansas, Illinois, Kansas, Louisiana, Mississippi, Oklahoma and Texas.

    Using “Warrant Enforcement Division” or “Municipal Enforcement Division” letterhead that falsely suggested that the letter was coming from a government agency, the defendants sent consumers an initial warning letter, and then a “FINAL NOTICE” falsely claiming, among other things, that the consumer was subject to imminent arrest for nonpayment, that their driver’s license may be suspended for nonpayment, and that the debts would be reported to consumer reporting agencies.

    The defendants, who also employ collectors who call people in English and Spanish, are charged with violating the FTC Act and the Fair Debt Collection Practices Act (FDCPA).

    Under a proposed stipulated order, the defendants are prohibited from making misrepresentations to collect debts, including: that an arrest warrant has been issued, that consumers must act immediately to avoid arrest, that failure to respond may lead to suspension of a driver’s license, that the defendants’ communications are from a government entity with arrest power, and that consumers’ payment status will be reported to credit reporting agencies.

    The order also prohibits the defendants from making unsubstantiated claims and violating the FTC Act and the FDCPA, and imposes a $350,000 judgment that must be paid within seven days.

    The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 2-0. The U.S. District Court for the Eastern District of Texas, Sherman Division, entered the order on March 21, 2017.

    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. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

    The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

    Contact Information

    MEDIA CONTACT:
    Frank Dorman
    Office of Public Affairs
    202-326-2674

    STAFF CONTACT:
    Luis Gallegos or Aaron Haberman
    FTC Southwest Region
    214-979-9383, -9381

    Related Cases

    American Municipal Services Corporation

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    FTC Charges Online Marketing Scheme with Deceiving Shoppers — “Free” and “risk-free” trials come with hidden charges

    Friday, March 24th, 2017

    “Free” and “risk-free” trials come with hidden charges

    The Federal Trade Commission has charged a group of online marketers with deceptively luring consumers with “free” and “risk-free” trials for cooking gadgets, golf equipment, and access to related online subscription services.

    According to the FTC, the defendants asked people for their credit card information to cover shipping and handling, and then charged them for products and services without their consent. The FTC’s complaint alleges that Brian Bernheim, Joshua Bernheim, Jared Coates, Robert Koch AAFE Products Corp., JBE International LLC, BSDC Inc., KADC Inc., Purestrike Inc., and BNRI Corp., formerly known as Bernheim and Rice Inc., violated the FTC Act and the Restore Online Shoppers’ Confidence Act.

    According to the complaint, the defendants’ websites, TV infomercials and email deceived consumers by prominently claiming that their products and services were free, without clearly disclosing that they would start charging consumers if they did not cancel their “free trial” or return the “free” products. They also misrepresented their return, refund and cancellation policies. Specifically, they buried these terms in pages of fine print that people could reach only through a tiny hyperlink.

    During the purchase process, the defendants signed consumers up for more “free” trials after forcing them to click through as many as 14 upsell pages to reach a final confirmation page.  According to the complaint, many of those pages included poorly disclosed, or undisclosed, additional “free trials” that resulted in yet more unauthorized charges.

    The defendants marketed their products under various company names, including Kitchen Advance, Gourmet Cooking Online, Gourmet Cooking Rewards, Medicus Golf, Kick X Tour Z Golf Balls, Golf Online Academy, Golf Tour Partners and Purestrike Swing Clinic.

    The Commission vote authorizing the staff to file the complaint was 2-0. It was filed in the U.S. District Court for the Southern District of California.

    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 case will be decided by the court.

    Mortgage insurance

    Thursday, March 23rd, 2017

    Please contact us if the termination date of private mortgage insurance was extended following a loan modification.

    Private student loans

    Saturday, March 18th, 2017

    Please contact us if you are in Illinois and someone is trying to collect a private student loan on which there has been no payment for more than five years.

    Los Angeles-Based Sage Auto Group Will Pay $3.6 Million to Settle FTC Charges

    Tuesday, March 14th, 2017

    Los Angeles-Based Sage Auto Group Will Pay $3.6 Million to Settle FTC Charges

    Allegedly Used Deceptive and Unfair Sales and Financing Tactics

    FOR RELEASE

    Sage Automotive Group – nine Los Angeles-based auto dealerships, their holding and management companies, and two individuals – has agreed to pay more than $3.6 million for return to consumers in order to settle Federal Trade Commission charges that it used deceptive and unfair sales and financing practices, deceptive advertising, and deceptive online reviews.

    The proposed settlement order, which will be filed in the U.S. District Court for the Central District of California for approval, will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing, and endorsements or testimonials.

    The proposed order will also bar the defendants from engaging in other unlawful conduct when a sale is cancelled, such as failing to return any down payment or trade-in or seeking legal action, arrest, repossession or debt collection unless the action is lawful and the defendants intend to take such action. It also prohibits them from violating the Truth In Lending Act and Regulation Z, and the Consumer Leasing Act and Regulation M.

    The corporate defendants are Universal City Nissan, Inc., also d/b/a Universal Nissan; Sage Downtown, Inc., also d/b/a Kia of Downtown Los Angeles; Glendale Nissan/Infiniti, Inc., also d/b/a Glendale Infiniti and Glendale Nissan; Valencia Holding Co., LLC, also d/b/a Mercedes-Benz of  Valencia; West Covina Auto Group, LLC, also d/b/a West Covina Toyota and West Covina Toyota/Scion; West Covina Nissan, LLC; Covina MJL, LLC, also d/b/a Sage Covina Chevrolet; Sage North Hollywood, LLC, also d/b/a Sage Pre-Owned; Sage Vermont, LLC, also d/b/a Sage Hyundai; Sage Holding Company Inc. and Sage Management Company Inc.

    The individual defendants are Joseph Schrage and Michael Schrage.

    The Commission vote approving the stipulated final order was 2-1, with Acting Chairman Maureen K. Ohlhausen dissenting.

    NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge

    FTC Reaches Settlement With Nationwide Debt Relief Provider

    Tuesday, March 7th, 2017

    A debt relief company and its principals who allegedly misled consumers and charged illegal advance fees will be banned from those practices under a settlement with the Federal Trade Commission.

    According to the FTC’s complaint, United Debt Counselors LLC exaggerated how much money people would save using its services. The company’s direct mail ads, which reached up to 100,000 consumers per week, looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months.

    The defendants allegedly repeated similar claims on their website and by phone when consumers called in response to the mail. They claimed a high success rate and asserted that consumers rarely dropped out of their program. The defendants also claimed they provided consumers with a special savings account that only consumers could control, but according to the FTC, the defendants removed monthly fees from the accounts.

    The FTC alleged that consumers who wanted to buy the debt relief services were told they had to meet with an experienced sales representative, but instead the defendants sent notaries public, who had scant product knowledge, to show a sales video and witness contract signings. The defendants typically charged advance fees before they negotiated any savings on credit card debts. Such advance fees violate the FTC’s Telemarketing Sales Rule (TSR) unless consumers first meet face-to-face with a knowledgeable sales representative who can fully describe the program and answer questions.

    According to the FTC, fewer than half of those who bought the services completed the program, and even fewer were debt-free at the end of 36 months.

    The defendants are United Debt Counselors LLC, also known as United Debt Services LLC and also doing business as Department of Negotiations; David Melrose; Kirk Lanahan and Corinne Maples.

    Under a stipulated order, the defendants are banned from making misrepresentations about debt relief and other financial products or services, and making unsubstantiated claims about any products or services. They can charge advance fees only if they comply with the TSR; sales persons making face-to-face sales presentations must have authority to discuss material terms, they must do so in specific detail, and they must be able to answer consumers’ questions. The order imposes a $9 million judgment that represents the amount of alleged harm to consumers. It will be partially suspended upon payment of $510,000. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

    The FTC has previously instructed debt relief companies that representations about debt relief services are deceptive unless all consumers are included in the calculations, and it has warned businesses not to engage in sham face-to-face presentations. To learn more, read Debt Relief Services & the Telemarketing Sales Rule: A Guide for Business.

    The Commission vote authorizing the staff to file the complaint and stipulated final order was 2-0. The FTC filed the complaint and final order in the U.S. District Court for the Eastern District of Texas, Sherman Division.

    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. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

    Debt collection abuse and imposter scams are most common consumer complaints

    Friday, March 3rd, 2017

    Imposter scams are now the second most common source of consumer complaints

    Imposter scam complaints surpassed identity theft for the first time as the second most common category of consumer complaints received by the Federal Trade Commission’s Consumer Sentinel Network in 2016, according to the agency’s new Data Book.

    Although debt collection complaints declined slightly between 2015 and 2016, they remained the top consumer complaint category, comprising 28 percent of all complaints. The high number of reported debt collection complaints was due in part to complaints submitted by a data contributor who collects complaints via a mobile app.

    The rise in impostor scam reports is due to an increase in complaints about government imposters. Imposter scams come in many varieties, but work the same way: a scammer pretends to be someone trustworthy, such as a government official or computer technician to convince a consumer to send money. Imposter scams also topped the list of complaints from military consumers followed by identity theft complaints.

    Identity theft complaints declined from 16 percent in 2015 to 13 percent in 2016, with 29 percent of 2016 consumers reporting that their data was used to commit tax fraud. There was a jump in those consumers who reported that their stolen data was used for credit card fraud; this figure rose from nearly 16 percent in 2015 to more than 32 percent in 2016.

    “Our latest data book shows that imposter scams are a serious and growing problem, and you can be sure that the FTC will use all the tools at its disposal to address it,” said Thomas Pahl, acting director of the FTC’s Bureau of Consumer Protection. “That includes law enforcement actions against scammers and consumer education to help consumers avoid losing money.”

    The most widely reported method of payment (58 percent) for those who reported losing money to fraud was a wire transfer. Of those who noted in their fraud complaint how they were first contacted, 77 percent said it was by phone.

    The FTC urges consumers to be wary of any caller asking for a wire transfer. The government will not ask a consumer to wire money, and it is illegal for telemarketers to ask you to pay by wire. Consumers who get a suspicious call should take their time and check it out. Call the government agency on a phone line you know to be real — not the phone number given by the suspicious caller.

    In 2016, the Consumer Sentinel Network collected more than 3.1 million consumer complaints, which the FTC has sorted into 30 top complaint categories. As with 2015, Florida, Georgia and Michigan were the top three states for fraud and other complaints, while Michigan, Florida and Delaware were the top three states for identity theft complaints.

    The complaint categories making up the top 10 are:

     

    Number of complaints

    Percentages
    Debt Collection 859,090 28
    Impostor Scams 406,578 13
    Identity Theft 399,225 13
    Telephone and Mobile Services   292,155 10
    Banks and Lenders   143,987   5
    Prizes, Sweepstakes and Lotteries   141,643   5
    Shop-at-Home and Catalog Sales   109,831   4
    Auto-Related Complaints     94,673   3
    Credit Bureaus, Information Furnishers and Report Users     49,679   2
    Television and Electronic Media 49,546   2

    The FTC produces the Consumer Sentinel Network Data Book annually using complaints received by the Consumer Sentinel Network. These include complaints made directly by consumers to the FTC, as well as complaints received by state and federal law enforcement agencies, national consumer protection organizations, and non-governmental organizations.

    The Data Book includes national statistics, as well as a state-by-state listing of top complaint categories in each state and a listing of metropolitan areas that generated the most complaints per capita.

    The Consumer Sentinel Network’s secure online database is currently available to more than 2,300 individual users in civil and criminal law enforcement agencies across the country and abroad. Agencies use the data to research cases, identify victims and track possible targets. Although non-governmental organizations may contribute data to the database, only law enforcement agencies can access the databas

    HBLC, CGR Services

    Friday, March 3rd, 2017

    Please contact us if you have been sued by debt buyers HBLC or CGR Services