In the following matter, the Commission has authorized staff to file a modification to an order for permanent injunction: Creditmart Financial Strategies, Inc. (Creditmart). In September 1999, as part of the FTC's "Operation Protection Deception" law enforcement sweep, the Commission filed a complaint and stipulated order for permanent injunction, consumer redress, and other equitable relief against Canadian defendants Creditmart and its sole owner and director Maurice Verrelli. The complaint alleged violations of the FTC Act and Telemarketing Sales Rule in connection with the deceptive sale of credit card loss protection insurance to U.S. consumers. The order banned the defendants from selling such products or services and required them to pay consumer redress of $100,000 in lieu of a suspended judgment of $9.2 million. It also authorized the Commission to file a motion to reopen the judgment if the defendants' financial statements were found to be inaccurate or incomplete.
Following the filing of the complaint and stipulated order, the defendants defaulted on the required redress payments. Staff subsequently uncovered evidence that defendants made misstatements in their financial disclosures and filed a motion to reopen the judgment, seeking the full $9.2 million payment. The defendants then made consumer redress payments totaling $30,000. Through the stipulated modification that has now been approved by the Commission, the consumer redress provision of the original order will be replaced by new provisions including the requirement that the defendants pay $140,000 in consumer redress, in monthly installments of $5,000 plus interest. If they fail to make a payment, the full $9.2 million would be immediately due and payable. As with the prior order, the Commission may reopen the judgment and seek additional redress if the defendants are found to have filed inaccurate or incomplete financial disclosures in connection with the revised order.
The Commission vote to approve filing of the order modification was 5-0. (FTC File No. X990094; staff contact is Mary T. Benfield, FTC Northwest Region, 206-220-4472; see press release dated October 30, 2000.)
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. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.