UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
FEDERAL TRADE COMMISSION, and STATE OF NEVADA ex rel. FRANKIE SUE DEL
PAPA, ATTORNEY GENERAL,
CONSUMER CREDIT SERVICES, INC., a Nevada corporation; and ERIC A.
PETERSEN, individually and as an officer of Consumer Credit Services, Inc.
CIVIL ACTION NO.
JUDGMENT AND ORDER
FOR PERMANENT INJUNCTION
AND CONSUMER REDRESS
Plaintiffs, the Federal Trade Commission and the State of Nevada
(Plaintiffs), have filed their complaint pursuant to Sections 13(b) and 19 of
the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, the
Telemarketing and Consumer Fraud and Abuse Prevention Act (Telemarketing Act),
15 U.S.C. § 6101 et seq., and the Nevada Deceptive Trade Practices Act, NRS § 598,
charging Defendants Consumer Credit Services, Inc. and Eric A. Petersen in this action
with violations of Section 5 of the FTC Act, 15 U.S.C. § 45, the FTC's Trade Regulation
Rule entitled the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the Nevada Deceptive
Trade Practices Act, NRS § 598.
Plaintiffs and Defendants have agreed to the entry of this Stipulated Final Judgment
and Order for Permanent Injunction and Consumer Redress ("Order") by this Court
in order to resolve all matters of dispute between them in this action.
NOW, THEREFORE, Plaintiffs and Defendants having requested the Court to enter this
Order, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:
- This Court has jurisdiction of the subject matter of this case and of the parties
- This is an action by the Plaintiffs instituted under Sections 13(b) and 19 of the FTC
Act, 15 U.S.C. §§ 53(b) and 57b, the Telemarketing Act, 15 U.S.C. § 6101 et seq., and
the Nevada Deceptive Trade Practices Act, NRS § 598. Pursuant to these sections of the
FTC Act, the Telemarketing Act, and the Nevada Deceptive Trade Practices Act, Plaintiffs
have the authority to seek the relief they have requested.
- The Complaint states a claim upon which relief may be granted against Defendants under
Sections 5 and 19 of the FTC Act, 15 U.S.C. §§ 45 and 57b, the Telemarketing Sales Rule,
16 C.F.R. Part 310, and the Nevada Deceptive Trade Practices Act, NRS § 598.
- Plaintiffs, by and through their counsel, and defendants, by and through their counsel,
have agreed to entry of this Order by this Court, without trial or adjudication of any
issue of fact or law, and without an admission of any allegation or offense charged in the
Complaint. Defendants declare that, prior to, and in connection with, the execution of
this Order, they have been apprised of sufficient information, either through experts,
legal counsel or other sources of their own selection, so as to exercise their judgment
intelligently in deciding whether to execute this Order.
- The parties hereto each state that this Order is executed voluntarily and with full
knowledge of its significance and legal effect.
- The parties agree that this Order shall stand as settlement in full of all claims
against defendants, as alleged in the Complaint. Plaintiffs, however, retain the right to
enforce the terms of the Order. For purposes of N.R.S. §598.0999, this Order shall be
deemed an Order of the Court. This Court retains jurisdiction of this matter for purposes
of construction, modification and enforcement of this Order. Defendants have waived all
rights to seek appellate review of, or otherwise challenge or contest the validity of,
- Defendants have waived all claims under the Equal Access to Justice Act, 28 U.S.C. §
- Entry of this Order is in the public interest.
A. "Assets" means any legal or equitable interest in, right to, or claim to,
any real and personal property, including but not limited to chattels, goods, instruments,
equipment, fixtures, general intangibles, effects, leaseholds, mail or other deliveries,
inventory, checks, notes, accounts, credits, receivables, and all cash, wherever located.
B. "Document" is synonymous in meaning and equal in scope to the usage of the
term in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs,
charts, photographs, audio and video recordings, computer records, and other data
compilations from which information can be obtained and translated, if necessary, through
detection devices into reasonably usable form. A draft or non-identical copy is a separate
document within the meaning of the term.
C. Customer means any person who is or may be required to pay for goods or
services offered through telemarketing.
D. Material means likely to affect a persons choice of, or conduct
regarding, goods or services.
E. Person means any individual, group, unincorporated association, limited
or general partnership, corporation, or other business entity.
F. Seller means any person who, in connection with a telemarketing
transaction, provides, offers to provide, or arranges for others to provide goods or
services to the customer in exchange for consideration.
G. Telemarketer means any person who, in connection with telemarketing,
initiates or receives telephone calls to or from a customer.
H. Telemarketing means a plan, program, or campaign which is conducted to
induce the purchase of goods or services by use of one or more telephones and which
involves more than one interstate telephone call. The term does not include the
solicitation of sales through the mailing of a catalog, provided such solicitation meets
the requirements of Section 310.2(u) of the Telemarketing Sales Rule, 16 C.F.R. §
I. Unless otherwise indicated, defendants refers to defendant Consumer
Credit Services, Inc. and defendant Eric A. Petersen.
PROHIBITED BUSINESS ACTIVITIES
This Order having been reviewed by the Court and having been found to have been entered
into in good faith and to be in all respects just, reasonable, equitable, and adequate to
protect the public from the occurrence in the future of the conduct alleged in the
IT IS THEREFORE ORDERED that Defendants, Consumer Credit Services, Inc. and Eric
A. Petersen, and their officers, agents, servants, employees, attorneys, and all persons
or entities directly or indirectly under their control or under common control with them,
and all other persons or entities in active concert or participation with them, are hereby
permanently restrained and enjoined from:
A. Misrepresenting that consumers will receive:
- an unsecured credit line of any stated amount without restrictions;
- cash advances of $2,500 or any other stated amount; or
- a credit card that is represented to be a general credit card, or that can be used to
purchase goods and services from numerous merchants;
B. Misrepresenting their abilities to obtain or to provide credit cards, lines of
credit, cash advances, or other extensions of credit to or for consumers regardless of the
consumers credit histories;
C. Misrepresenting that consumers can obtain unsecured Visa or MasterCard credit cards;
D. Violating the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the Nevada Deceptive
Trade Practices Act, N.R.S. § 598.0903 et seq., including but not limited to:
- Violating Section 310.4(a)(4) of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(a)(4),
and the Nevada Trade Practices Act, NRS § 598.282, by requesting or receiving
payment of any fee or consideration in advance of obtaining a loan or other extension of
credit when Defendants have guaranteed or represented a high likelihood of success in
obtaining or arranging a loan or other extension of credit for a person; and
- Violating Section 310.3(a)(1) of the Telemarketing Sales Rule, 16 C.F.R. §310.3(a)(1)
and the Nevada Deceptive Trade Practices Act, NRS § 598.0923(2), by failing to disclose,
in a clear and conspicuous manner, before a customer pays for goods or services that are
subject of the sales offer, all material restrictions, limitations, or conditions to
receive the goods or services that are the subject of the sales offer.
E Operating as a credit service organization, as such term is defined by the Nevada
Deceptive Trade Practices Act, NRS Chapter 598.281(5), without duly registering and
posting the required bond or other security with the Nevada Consumer Affairs Division, as
provided by the Nevada Deceptive Trade Practices Act, NRS Chapter 598.
IT IS FURTHER ORDERED that Defendant Consumer Credit Services, Inc. and
Defendant Petersen shall, jointly and severally, pay to the Office of the Attorney General
of Nevada the sum of Five Thousand dollars ($5,000). Payment shall be due no later than
three days after the date of entry of this Order. In the event of any default on any
obligation to make payment under this Part, interest, computed pursuant to 28 U.S.C. §
1961(a), shall accrue from the date of default to the date of payment.
The funds paid by Defendants Pursuant to Part II shall be deposited into a redress
fund, administered by the Plaintiffs, to be used for equitable relief including but not
limited to consumer redress and any attendant expenses for the administration of any
redress fund. The Plaintiffs in their sole discretion may use a designated agent to
administer consumer redress. If the Plaintiffs determine, in their sole discretion, that
redress to purchasers is wholly or partially impracticable, any funds not so used shall be
paid to the United States Treasury or to the Office of the Attorney General of Nevada in
lieu of redress. The Plaintiffs and Defendants acknowledge and agree that this judgment
for equitable monetary relief is solely remedial in nature and is not a fine, penalty,
punitive assessment, or forfeiture.
IT IS FURTHER ORDERED that the Plaintiffs agreement to this Order is expressly
premised upon the truthfulness, accuracy and completeness of the Defendants
Financial Statements executed on November 14, 1997 (for Defendant Petersen) and dated
October 31, 1997 (for CCS), which contain material information upon which the Plaintiffs
relied in negotiating and agreeing to this Order. If, upon motion by Plaintiffs, this
Court finds that these Financial Statements failed to disclose any material asset, or
materially misrepresented the value of any asset, or contained any other material
misrepresentation or omission, the Plaintiffs may request that the Order herein be
reopened for the purpose of providing for the payment by Defendants of redress to
purchasers of Defendants' services; provided, however, that in all other respects this
Order shall remain in full force and effect unless otherwise ordered by the Court; and
provided further, that proceedings instituted under this Paragraph are in addition to and
not in lieu of any other civil or criminal remedies as may be provided by law, including
any other proceedings the Plaintiffs may initiate to enforce this Order. Solely for the
purposes of reopening and enforcing this Order under this Paragraph, Defendants waive any
right to contest any of the allegations in the complaint filed in this matter.
IT IS FURTHER ORDERED that, in order to facilitate the Plaintiffs
monitoring of compliance with the provisions of this permanent injunction, the Defendants
shall, for three (3) years after the date of entry of this Order:
A. Notify the Plaintiffs in writing, within thirty (30) days after service of this
Order, of his current home address, and employment status, including the name and business
address of his current employer, if any;
B. Notify the Plaintiffs in writing within thirty (30) days of any change in his home
address or telephone number and provide such new address and telephone number;
C. Notify the Plaintiffs in writing within thirty (30) days of any change in employment
status; such notice shall include the name, address, and telephone number of his new
employer, a statement of the nature of the business of his employer, and statements of
duties and responsibilities in connection with the business;
D. Notify the Plaintiffs in writing within (30) days of any change in the structure of
any business entity owned or controlled by either Defendant, such as creation,
incorporation, dissolution, assignment, sale, creation or dissolution of subsidiaries, or
any other changes that may affect compliance obligations arising out of this Order;
E. Upon reasonable written notice from the Plaintiffs, permit duly authorized
representatives of the Plaintiffs access during normal business hours to the offices of
any company under the control of either Defendant, wherever located, to inspect and to
copy all documents belonging to either of them and all documents of any company owned or
controlled by either of them in whole or in part, relating in any way to any conduct
subject to this Order;
F. Refrain from interfering with duly authorized representatives of the Plaintiffs who
wish to interview upon reasonable written notice, the employers, agents, and employees of
Defendants (who may have counsel present) relating in any way to any conduct subject to
G. Within ten (10) days of the entry of this Order, provide to all current employees
who are engaged in the selling or are offering to sell credit services or credit products
a copy of this Order and secure from each such employee a signed, dated statement, in
writing, acknowledging receipt of such copy, which statement shall be maintained and made
available to the Plaintiffs for inspection and copying upon request; and
H. Within ten (10) days of their first day of employment, deliver to all future
employees who are engaged in selling or are offering to sell credit services or credit
products a copy of this Order and secure from each such employee a signed, dated
statement, in writing, acknowledging receipt of such copy, which statement shall be
maintained and made available to the Plaintiffs for inspection and copying upon request.
Provided further, that the Plaintiffs may otherwise monitor Defendants compliance
with this Order by all lawful means available, including but not limited to the use of
investigators posing as consumers, potential investors, suppliers and other entities.
IT IS FURTHER ORDERED that Defendants, for three (3) years after the last date
of dissemination of all advertisements and promotional materials relating to practices
covered by this Order, maintain and upon request make available to the Plaintiffs for
inspection and copying:
A. Said advertisements and promotional materials; and
B. All lists of purchasers of credit services or credit products.
IT IS FURTHER ORDERED that all notices required of the Defendants shall be sent
Jane D. Femiano, Esq.
The Office of the Attorney General
555 E. Washington Ave, Suite 3900
Las Vegas, NV 89101
or to such other address to which the parties may subsequently agree.
IT IS FURTHER ORDERED that, within sixty (60) days after the date of entry of
this Order, Defendants shall file a report with the Plaintiffs setting forth the manner
and form in which they have complied with this Order.
Each party to this Order hereby agrees to bear its own costs and attorney fees incurred
in connection with this action.
IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
The parties agree and stipulate to entry of the foregoing Order as a Final Judgment in
|FEDERAL TRADE COMMISSION
Jerome M. Steiner, Jr.
Attorney for Plaintiff
Federal Trade Commission
|STATE OF NEVADA
Jane D. Femiano
Attorney for Plaintiff
State of Nevada
LAW OFFICES OF HALL DICKLER
KENT FRIEDMAN & WOOD
Eric A. Petersen, individually
and as President of Consumer
Credit Services, Inc.
Marc S. Roth
Attorneys for Defendants
Consumer Credit Services, Inc. and
Eric A. Petersen
IT IS SO ORDERED, this _____ day of _____________, 1997.
United States District Judge