SE HABLA ESPAÑOL | MAP
312-739-4200
Contact Us

Contact Us

Archives

  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013

  • Areas & Topics

    Frquently Asked Questions

    Our Office Location

    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


    E-mail Us  |  Chicago Law Office

    Edelman Combs Latturner Goodwin's facebook page   Edelman Combs Latturner Goodwin's Twitter Page   Edelman Combs Latturner Goodwin's Google Plus Page

    FTC Goes After Debt Relief Companies Who Deal With Payday Loans

    Complaint is Agency’s First against Defendants Promising Payday Loan Debt Relief

    The Federal Trade Commission has filed a complaint in federal district court, aiming to stop an operation that has targeted consumers with outstanding payday loans, saying they could help resolve those debts but then providing little or none of the financial relief they promised. As a result, many consumers stopped making payments to the original lenders and found themselves in even deeper financial trouble, having paid hundreds of dollars in fees for no benefit.

    “The defendants promised to help people struggling to make payments on their payday loans,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Instead, they took the money and ran, leaving their customers deeper in debt.”

    According to the FTC’s complaint against Payday Support Center, LLC, now known as PSC Administrative, LLC, and related parties, starting in August 2012 the defendants have used the Internet, radio, and telemarketing to target consumers who owe multiple debts on payday loans, which are typically short-term loans with high interest rates.

    The FTC alleges that the defendants induce consumers into enrolling in their “financial hardship program” by claiming that they will negotiate with the lenders to reduce consumers’ payments and eliminate their debt. They advise consumers to stop making direct payments to their lenders and to pay money to the defendants instead, promising that within four to six months, the loans will be paid off.

    Their radio and the Internet advertisements include statements such as:

    • “Are payday loans ruining your life? Do you have more payday loans than you’re able to pay back right now? If you have two or more payday cash advance loans, listen closely…”
    • “All you need is two or more payday loan cash advances to qualify. Even if you’re behind, in collections or have bad credit. We’ll even help you with your internet payday loans…”

    The FTC alleges that, in telemarketing calls targeting these financially distressed consumers, the defendants say that they have gone through a “qualifications check,” and that consumers are confirmed to participate in their special “financial hardship program.” They then promise to “get rid of,” “pay off,” or “take care of” all of the consumers’ payday loan debts.

    They allegedly also tell consumers that they will negotiate “interest free” payment on the loans through the program, falsely implying that the debts would be paid off, free of all interest and fees. As part of the program, the defendants require consumers to make bi-weekly payments to them, typically between $98 and $160.

    In reality, the FTC alleges, the defendants provide little or no debt relief services for their clients, and their limited actions do not generally eliminate or even reduce most clients’ payday loans. While the defendants send “validation” form letters to some lenders, the lenders typically have ignored these letters and continued their collection efforts.  Based on this conduct, the FTC has charged the defendants with violating the FTC Act, which prohibits deceptive acts and practices, and the agency’s Telemarketing Sales Rule, which prohibits abusive and deceptive telemarketing practices.

    The complaint names as defendants: 1) PSC Administrative, LLC, formerly known as Payday Support Center, LLC; 2) Coastal Acquisitions, LLC, doing business as Infinity Client Solutions; 3) Jared Irby, individually and as an officer of PSC Administrative, LLC; and 4) Richard Hughes, individually and as an officer of PSC Administrative, LLC.

    In filing the complaint, the FTC is seeking to permanently stop the defendants’ allegedly illegal conduct, as well as a monetary judgment for refunds to return to consumers defrauded by the operation.