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 â€” typically $2,500 or more â€” 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 FTCâ€™s Telemarketing Sales Rule, using or selling customersâ€™ information, failing to properly dispose of customer information, and from collecting payments from debt relief customers (â€śFTC Settlements Puts Debt Relief Operations Out of Business,â€ť 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.
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.
Default judgment and order for permanent injunction: FTC v. Alpha Financial Debt Group Inc. Filed April 27, 2011.
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