Debt Relief Scammers to Pay $7.9 Million to Settle FTC Complaint
The head of a sham debt relief operation agreed to a judgment of more than $7.9 million to settle Federal Trade Commission (FTC) charges that he deceived consumers and charged them thousands of dollars while providing nothing in return.
The agreement settles a May 2014 complaint that DebtPro 123 falsely told consumers that the program would settle all of their debts and repair their credit. In reality, victims of the scam ended up in more debt and worsening credit.
The company told consumers to send their payments to the company rather than to their previous creditors. Since DebtPro 123 never negotiated any repayment terms with the old creditors, consumers found themselves accruing interest, late charges, in lawsuits, having their wages garnished, and sometimes had to file bankruptcy.
Under proposed stipulated court orders, the scheme's ringleader, Bryan Taylor, and co-defendants Ryan Foland, Stacey Frion, and Kara Wilbur Taylor, are banned from selling debt relief products or services. They are also prohibited from making unsubstantiated claims for any product or service, and making material misrepresentations, either directly or through others, about any product or service. In addition, they are barred from: telemarketing without keeping certain records and making certain disclosures; profiting from customers' personal information; and failing to properly dispose of customer information.
Along with being banned from the debt relief business, the order also requires Brian Taylor to admit to the allegations made against him and pay a fine of more than $7.9 million.
The proposed orders against Foland, Frion, and Kara Taylor impose the same financial judgment, which will be suspended upon the surrender of certain assets by Foland. The full judgments will become due immediately if Foland, Frion or Kara Taylor are found to have misrepresented their financial condition.
The FTC is also seeking judgements against six corporate defendants that took part in the scheme.