LIST OF DEFENDANTS IN FTC CASES IN ADVANCE-FEE LOAN FRAUD CRACKDOWN

 

DEFENDANTS:

Action Credit Services, Inc.
ABCO, Inc.
Loan By Phone Financing, Inc., d/b/a Burlington Credit Services
Beaumont Credit Services, Inc.
Budget Credit Services, Inc.
Hunter Credit Corporation, Inc.
Jodi Wolin
Laurence J. Smith

LOCATIONS:

Boca Raton, Pompano Beach, and Margate, Florida and Dothan, Alabama

NATURE OF BUSINESS:

These companies and individuals operated as one common enterprise whose purpose was to market an advance fee loan scheme. Action, Loan by Phone Financing, d/b/a Burlington, and Budget acted as telemarketing or sales companies offering a credit package to consumers, while ABCO, Beaumont and Hunter operated as for-hire bill paying services. The defendants advertised "debt consolidation" services nationwide, and falsely represented to consumers that they would receive a debt consolidation loan for an "origination fee" of $289 to $298. However, once consumers paid the fee, they did not receive a debt consolidation or any other type of loan. Instead, they were offered a bill paying service, that required them to pay an additional fee. Defendants failed to disclose the total cost of their bill paying service before collecting the "origination fee," thereby misrepresenting the total cost of their program.

This case was referred to the FTC by U.S. military attorneys, and the FTC was assisted by the Margate, Florida Police Department, the Broward County Florida Sheriff's Office and the Florida Division of Banking and Finance.

STATUTES/RULES ALLEGEDLY VIOLATED:

FTC Act

MEDIA CONTACTS:

Ronald Laitsch, Paul Davis, and Andrea Foster,
FTC Atlanta Regional Office,
404-656-1390

(FTC File No. 972 3204); filed in U.S. District Court for the Southern District of Florida, Ft. Lauderdale Division on Jan. 7, 1998; Civil Action No.: 98-6008 CIV-ZLOCH.

DEFENDANTS:

Gary Walton, doing business as Pinnacle Financial Services

LOCATION:

Prescott, Arizona

NATURE OF BUSINESS:

Walton, doing business as Pinnacle, served as a "turndown room" for at least 7 fraudulent Canadian advance fee loan telemarketers who target U.S. citizens. These Canadian telemarketers, advertising extensively in the U.S. through local newspapers and cable TV, represented that consumers were guaranteed or highly likely to get a loan and charged consumers an advance fee averaging several hundred dollars. The telemarketers then referred the consumer applications to Walton, who was paid a fee for every consumer referral. Walton then notified the consumers that an unidentified private lender had their loan application for review. Walton also operated his own advance fee loan scheme, and advertised in tabloid newspapers (such as the Enquirer and Star magazines) and on the Internet that he had a high success rate in obtaining loans for consumers, regardless of their credit histories. Walton charged a fee in advance and ultimately sent consumers denial letters.

STATUTES/RULES ALLEGEDLY VIOLATED:

FTC Act and the Telemarketing Sales Rule

CONTACTS:

Mary Benfield, Laureen France and Charles Harwood,
FTC Seattle Regional Office,
206-220-6350;

FTC File No. 972 3221; filed in U. S. District Court, District of Arizona, in Phoenix, on Jan. 6, 1998; Civil Action No.: CIV98-0018 PCT SMM.

DEFENDANTS:

Darryl Andre', also known as Darryl A. Roberts and Darryl Jones; and doing business as Creative Concepts, Premier Card Services, Premier Services, Tower Financial Services, Tower Services, Prime Credit Services, Prime Services, Colonial Financial Services, Colonial Financial, and Consumer Express  

Angela Andre', a/k/a Angela Jones d/b/a Premier Card Services, Premier Services, Tower Financial Services, Tower Services, Prime Credit Services, Prime Services, Colonial Financial Services, Colonial Financial, and Consumer Express  

Bryan D. Smith, d/b/a Tower Financial Services, Tower Services, Premier Card Services, and Premier Services;  

Anthony Q. Roberts, d/b/a Prime Credit Services, Prime Services, Premier Card Services, Premier Services, and Consumer Express

LOCATION:

Country Club Hills, Dolton and Hazelcrest, Illinois.

NATURE OF BUSINESS:

Four individuals, operating under a host of assumed names, deceptively marketed advance fee credit cards for an upfront fee. They sent unsolicited postcards to consumers promising approval for a major credit card with a high credit line. Consumers were told to call a toll-free number for more information. Consumers were promised that, for a $97.50 "processing" fee, to be deducted from consumers' checking account, they would receive a Visa or MasterCard credit card. Instead, consumers received a "Consumer Express" charge card that was only good for ordering from a mail order catalogue with high-priced specialty items. Defendants failed to tell consumers that they had to purchase over $400 worth of merchandise from the defendants' mail-order catalogue before the defendants would "sponsor" the consumers' application for a credit card.

The FTC acknowledges the assistance it received in this case from the Illinois Attorney General who served as co-plaintiff, and the United States Postal Inspection Service, Chicago Division, which provided substantial assistance in the investigation.

STATUTES/RULES ALLEGEDLY VIOLATED:

FTC Act and Telemarketing Sales Rule; and the Illinois Consumer Fraud and Deceptive Business Practices Act; Illinois Credit Services Organization Act

CONTACTS:

Steve Baker, Evan Siegel, and Charulata Pagar,
FTC Chicago Regional Office,
312-353-8156,

FTC File No. 982 3002; filed in the U.S. District Court for the Northern District of Illinois, Eastern Division, in Chicago; Civil Action No.: 98 C 0059

DEFENDANTS:

1. Plantation Marketing, Inc., and William H. Beecher, Sr.
2. Dynasty International Inc., and Christopher Anderson
3. Orion & Associates, Inc., and Paul J. Melech, Jr. and
4. Reno Boyd d/b/a Corren Enterprises, Inc.

(The defendants in each of these four separate cases have all settled with the FTC.)

LOCATIONS:

Jacksonville, Florida; Metairie, Louisiana; Clinton, Mississippi; and Atlanta, Georgia.

NATURE OF BUSINESS:

The defendants in each of the four cases did business as a third-party telemarketers for SureChek Systems, Inc., doing business as Consumer Credit Corporation (CCC), a company that the FTC brought an action against on July 9, 1997, under project "Peach Sweep." CCC used various telemarketers, including the above-named defendants, to solicit business under CCC's name and offered consumers a major unsecured credit card in return for an advance one-time processing fee ranging from $79.95 to $130.00. The defendants targeted consumers with credit problems, and told them that they were being offered or pre-approved for a Visa or MasterCard, with absolutely no security deposit, and regardless of their past credit history. The fees were withdrawn from consumers' bank account on unsigned bank drafts and deposited into CCC's account, sometimes without the consumers' authorization. After paying the fee, the majority of the consumers never received the credit cards.

The four proposed settlements with the above-named defendants would prohibit them from falsely representing that consumers would receive a credit card in exchange for a payment of a fee. Specifically, the defendants would be prohibited from misrepresenting that they will provide consumers with credit cards or arrange for such cards; that consumers' credit applications have been approved; and that consumers will receive credit cards regardless of their creditworthiness. In addition, the proposed settlement with the defendants in the Orion case requires them to pay $9000 in consumer redress, and the settlement in the Dynasty case requires those defendants to pay $22,000 in consumer redress. Defendants in the Plantation and Boyd cases are not required to pay redress because, based on their sworn financial statements, they do not have enough money to make redress practicable.

STATUTES/RULES ALLEGEDLY VIOLATED:

FTC Act and Telemarketing Sales Rule

CONTACTS:

Ronald Laitsch and Cindy A. Liebes,
Atlanta Regional Office,
404-656-1390;

Plantation Marketing, FTC File No. 972 3285; filed in the U.S. District Court, Middle District of Florida, Jacksonville Division, on Jan. 27, 1998; Civil Action No.: 98-82-CIV-J-10C;
Dynasty International, FTC File No. 972 3286; filed in the U.S. District Court, Eastern District of Louisiana, in New Orleans, on Jan 26, 1998; Civil Action No. 98-233 Section J Judge Carr;
Orion & Associates, FTC File No. 972 3287; filed in the U.S. District Court, Southern District of Mississippi, Jackson Division, on Jan. 26, 1998; Civil Action No. 3:98CV83 LEN; and
Corren Enterprises, FTC File No. 972 3292; filed in the U.S. District Court, Northern District of Georgia, Atlanta Division, on Jan. 26, 1998;Civil Action No. 198-CV-0237.