The Federal Trade Commission has issued five settlement orders totaling more than $30 million against several debt relief firms for their roles in a scam that falsely promised to save consumers thousands of dollars by reducing their credit card interest rates.

According to the FTC, Dynamic Financial Group and co-defendants Thriller Marketing LLC, Michael Falcone, Sean Rogister, and Alpha Financial Debt Group Inc., used robocalls to falsely promise consumers they could reduce credit card interest rates in exchange for a $1,995 advance fee. Consumers were told that the lower interest rate would save them thousands of dollars because they would be able to pay off their debt faster.

The defendants also allegedly promised consumers a full refund if consumers did not save a guaranteed amount — typically $2,500 or more — which was required to negotiate lower interest rates with credit card companies.

The defendants failed to negotiate lower interest rates for consumers and failed to provide refunds, according to the FTC.

All five settlement orders ban the defendants, based in Canada, Florid, and New Jersey, from selling debt relief services and misrepresenting material facts about goods and services. The defendants are also prohibited from violating the FTC’s Telemarketing Sales Rule, using or selling customers’ information, failing to properly dispose of customer information, and from collecting payments from debt relief customers (“FTC Settlements Puts Debt Relief Operations Out of Business,” FTC press release, May 26, 2011).

The order against 2145183 Ontario Inc., which does business as Dynamic Financial Resolutions Inc., Dynamic Financial Group Inc., R&H Marketing Concepts Inc., America Freedom Advisors Inc., Joseph G. Rogister, and Christopher M. Hayden, also contains prohibitions against robocalling and imposes and imposes an $8.3 million judgment.

The order against Thriller Marketing LLC, imposes a $4.9 million judgment against defendants Dwayne J. Martins and John L. Franks Jr. and an $8.3 million judgment against Frank Porporino Jr., who is also prohibited from robocalling.

The two orders against Michael Falcone and Sean Rogister impose judgments of $93,137 and $90,473, respectively, and ban them from robocalling.

An default judgment against Alpha Financial Debt Group Inc. imposed a $8.68 million judgment and banned the company from robocalling.

The FTC is continuing to pursue litigation against Philip N. Constantinidis, the last remaining defendant.

Further Reading

Stipulated final judgment and order for permanent injunction: FTC v. Michael Falcone. Filed April 27, 2011.

Stipulated final judgment and order for permanent injunction: FTC v. Frank Porporino Jr. Filed April 27, 2011.

Stipulated final judgment and order for permanent injunction: FTC v. 2145183 Ontario Inc., et al. Filed April 27, 2011.

Stipulated final judgment and order for permanent injunction: FTC v. Thriller Marketing LLC, et al. Filed April 27, 2011.

Default judgment and order for permanent injunction: FTC v. Alpha Financial Debt Group Inc. Filed April 27, 2011.

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The Federal Trade Commission has settled with a credit card debt relief operation that allegedly scammed consumers by deceptively offering to reduce consumers’ credit card interest rates (“FTC Settlements Puts Debt Relief Operations Out of Business,” FTC press release, May 26, 2011).

Advanced Management Services NW LLC, PDM International Inc., and several codefendants allegedly called consumers on the Do Not Call Registry and used illegal robocalls to sell consumers bogus plans that consumers were told would result in lower credit card interest rates. Many consumers reported believing that the calls came from their credit card companies.

The defendants charged consumers up to $1,590 for the “service,” but instead of negotiating lower interest rates with credit card companies, the defendants allegedly simply sent consumers instructions on how they could reduce their own interest rates by paying down credit card debts early. When consumers called to get a refund, which was promised if the defendants failed to deliver at least $2,500 in interest rate savings, they were allegedly denied outright, given the runaround, or were given the refund, minus a $199 “nonrefundable fee.”

The settlement order against Advanced Management Services — also doing business as AMS Financial, Rapid Reduction Systems, and Client Services Group — and its co-defendants Ryan David Bishop and Michael L. Rohlf prohibits them from selling debt relief services, misrepresenting material facts about goods or services, selling or using customers’ personal information, failing to properly dispose of customer information, and collecting payments from debt relief customers. The order includes an $8.1 million judgment.

The settlement order against PDM International Inc. — also doing business as Priority Direct Marketing International Inc. — and co-defendant William D. Fithian imposes additional prohibitions against telemarketing and from violating the FTC’s Telemarketing Sales Rule. The order includes a $13.1 million judgment against the defendants.

The judgments against the defendants represent the total amount of money consumer lost. The judgments will be suspended upon surrender of all assets, but will be imposed in full if the defendants are found to have misrepresented their financial conditions.

Further Reading

Stipulated final judgment and order for permanent injunction and other equitable relief: FTC v. Advanced Management Services, et al. Filed May 3, 2011.

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