Massive Debt Relief Scam That Conned Consumers out of Millions of Dollars Halted

The Defendants claimed they would pay, settle, or obtain dismissals of consumers' debts and improve their credit

Massive Debt Relief Scam That Conned Consumers out of Millions of Dollars Halted
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May 24, 2017

At the request of the Federal Trade Commission (FTC) and the State of Florida, a federal court has temporarily halted a massive phony debt relief operation that bilked tens of millions of dollars from financially strapped consumers, including the elderly and disabled.

According to the FTC and Florida, Jeremy Lee Marcus, Craig Davis Smith, and Yisbet Segrea—through 11 different companies—got people to pay hundreds or thousands of dollars a month by falsely promising they would pay, settle, or obtain dismissals of consumers' debts and improve their credit. Over time, victims found their debts unpaid, their accounts in default, and their credit scores severely damaged—some were sued by their creditors, and some were forced into bankruptcy.

The FTC and Florida allege that the defendants falsely claimed non-profit status to appear more credible and legitimate to consumers. The defendants then promised guaranteed debt consolidation loans for tens of thousands of dollars with attractive interest rates and significantly lower monthly payments than consumers were paying their creditors.

Once consumers agreed to the purported loan, the defendants almost immediately debited the consumers' bank accounts for an initial loan "repayment" or a processing fee, and then kept debiting consumers' bank accounts each month, in amounts ranging from $200 to $1,000 or more. The FTC and Florida charge that the defendants, despite taking these monthly payments, failed to extend consumers the promised debt consolidation loans.

The defendants also called people who were already enrolled with debt relief providers, claiming they were taking over the servicing of those accounts and falsely claiming that they would provide the same or similar services. Many of their victims had worked for years with their previous debt relief providers and had saved money in escrow accounts for use in negotiating with creditors. The defendants told these consumers to transfer their escrow money to them, and then debited up to $1,000 each month from the consumers' bank accounts. Contrary to the defendants' promises, people got little to nothing for their money and ended up in worse financial positions.

Marcus, Smith, Segrea and their companies are charged with violating the FTC Act, the FTC's Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act.