The twelfth and final complaint filed through the FTC's recently announced "Operation Dialing for Deception" law enforcement action has been unsealed by the U.S. District Court for the Middle District of Florida in Jacksonville. The FTC charged First Freedom Financial Corporation, Southern Telmark Corp., and Thomas Gregg Holloway with violating the FTC Act and Telemarketing Sales Rule (TSR) by soliciting customers nationwide and falsely promising to provide them with credit cards for an advance fee ranging from $79 to $229. The FTC's complaint is available on the Commission's Web site.
The defendants used "in-bound" telemarketing, which means that consumers called them after seeing their ads in magazines such as Reader's Digest or receiving a post card inviting them to call a toll-free number for more information about a guaranteed credit card. After responding to the ads, which promised they would receive a credit card regardless of their credit history and with no security deposit required, the consumers found they had to pay the advance fee. The defendants allegedly also persuaded consumers to divulge their checking account information and routinely debited their accounts without their authorization, while not providing the card as promised. At best, in some cases, consumers received a "card" that could only be used to make purchases from the defendants' merchandise catalog. Some consumers also were provided with an application for a major credit card from a separate financial institution, but not with the card itself, after paying the advance fee.
In this matter, the Commission has sought and received a temporary restraining order against the defendants, the appointment of a receiver, immediate access to the defendants' business and files, an asset freeze, and other injunctive provisions. First Freedom and Telmark are South Carolina corporations, registered to do business in Florida, with their principal place of business in Jacksonville, Florida. The Commission vote authorizing staff to file the complaint was 5-0. The seal was lifted on April 16, 2002. The Florida Department of Agriculture Law Enforcement assisted the FTC in bringing this case. (FTC File No. 002-3076, Civ. No. 3:02-CV-343-J20TEM; staff contact is Ronald E. Laitsch, FTC Southeast Region, 404-656-1358; see related press release dated April 15, 2002.)
Commission authorization to file amended complaint:
The Commission has authorized the filing of an amended complaint in its federal district court action against Capital City Mortgage Corporation, Thomas K. Nash (Nash), and Eric J. Sanne. The FTC's action, which alleged illegal lending practices by the defendants, was set to go to trial on April 8, 2002 until Nash's death on April 6, 2002. The FTC has filed a motion for leave to amend the complaint to: 1) substitute the representatives of the estate of Nash for him individually; 2) join as relief defendants Jane Doe I -3 as the beneficiaries of three of his assets which have apparently passed outside his estate - Mortgage Bank Trust, the Capital City Mortgage Corporation Profit Sharing Plan Trust and First Investment Annuity Company Personal Investment Annuity Policy; and 3) add as relief defendants the Katherine R. Nash Trust, Ann E. Nash Trust, the Carolyn D. Nash Trust, and their trustee, Alan W. Nash, as well as Nash's father, Donald S. Nash, because they have received ill-gotten gains from the loans serviced by Capital City Mortgage Corporation. The vote to approve the filing of the motion for leave to file the amended complaint was 5-0. (FTC File No. X980026, staff contact is Joel Winston, Bureau of Consumer Protection; 202-326-3224; see press release dated January 30, 1998.)
Commission approval of interim trustee term extension:
The Commission has approved a one-year interim trustee term extension in the matter concerning Astaris LLC (FMC Corporation). Under Paragraph VI.A.4 of the FTC's final order in this matter, "at the option of the Commission," the term of the interim trustee appointed to monitor Astaris' divestiture of its P2S5 production facility within its Lawrence, Kansas, manufacturing complex may be extended by up to two years. The current term of interim trustee Conrad A. Keil expires on May 15, 2002. Through this action, the Commission has extended his term until May 15, 2003. The vote to approve the extension was 5-0. (FTC File No. C-3935; staff contact is Daniel P. Ducore, Bureau of Competition; 202-326-2526; see press releases dated April 7 and December 21, 2000.)
Commission approval of final consent orders:
Following a public comment period, the Commission has approved a final consent order in the matter concerning TechnoBrands, Inc. The vote to approve the final order was 5-0. (FTC File No. 992-3034, staff contact is Gregory Ashe, Bureau of Consumer Protection, 326-3719; see press release dated February 19, 2002.)
Following a public comment period, the Commission has approved a final consent order in the matter concerning Campbell Mithun LLC. The vote to approve the final order was 4-0, with Commissioner Sheila Anthony recused. (FTC File No. 012-3204, staff contacts are Richard Kelly and Kial Young, Bureau of Consumer Protection, 202-326-3525; see press release dated March 6, 2002.)
Following a public comment period, the Commission has approved a final consent order in the matter concerning Interstate Bakeries Corporation. The vote to approve the final order was 4-0, with Commissioner Sheila Anthony recused. (FTC File No. 012-3182, staff contacts are Richard Kelly and Kial Young, Bureau of Consumer Protection, 202-326-3525; see press release dated March 6, 2002.)
Following a public comment period, the Commission has approved a final consent order in the matter concerning Deutsche Gelatine-Fabriken Stoess AG (DGF) and Goodman Fielder Limited. The vote to approve the final order was 4-0, with Chairman Timothy J. Muris not participating. (FTC File No. 011-0117, staff contact is James H. Holden, Jr., Bureau of Competition, 202-326-2963; see press release dated March 7, 2002.)
Following a public comment period, the Commission has approved a final consent order in the matter concerning Palm, Inc. The vote to approve the final order was 5-0. (FTC File No. 022-3332, staff contact is Keith Fentonmiller, Bureau of Consumer Protection, 202-326-2263; see press release dated March 6, 2002.)
Copies of the documents mentioned in this release are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Call toll-free: 1-877-FTC-HELP.