FTC Files Complaint Against Phony Debt Relief Company
The Federal Trade Commission (FTC) has filed a complaint against a phony debt relief company that targeted those that are financially distressed.
The complaint alleges that the defendants purported to offer up to $75,000 in debt relief to consumers, along with promises that consumers' credit scores would increase within 30 days. Consumers contacting the scammers were told that in exchange for an advance service charge of $900 to $1,100, the defendants would pay off the consumers' debts.
Scammers would ask consumers for details of their outstanding debt, including account numbers, and then arrange bogus electronic payments that gave consumers the impression their debts were in fact being paid. The scammers would then tell consumers to pay the service charge, typically through money transfer services such as Western Union or MoneyGram. Once consumers paid the charge, the scammers would then reverse the payments made to consumers' bills, leaving consumers without the promised debt relief or improvements to their credit scores or limits.
The complaint also charges that two websites associated with the company were allegedly full of misrepresentations about the fake program, which they called the Bill Payment Government Assistance Program. The sites claimed that the program was governed by the Recovery Accountability and Transparency Board, a government agency formed to oversee projects funded by the American Recovery and Reinvestment Act of 2009. The company also falsely claimed the program was provided and funded by the federal government and endorsed by President Barack Obama, even using an audio recording of the President in a YouTube video.A U.S. district court for the District of Columbia issued a temporary restraining order earlier this week, but a final ruling is still pending.