UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
FT. LAUDERDALE DIVISION

FEDERAL TRADE COMMISSION,
Plaintiff,

v.

FRANKLIN CREDIT SERVICES, INC., a Florida corporation;
AMANSCO CREDIT SERVICES, INC., a Florida corporation; and
JAMES MICHAEL CHRISTENSEN, individually and
as an officer of the corporate defendants,
Defendants.

98-7375-CIV-(Gold)
Magistrate Judge

PLAINTIFF FEDERAL TRADE COMMISSION'S
COMPLAINT FOR PERMANENT INJUNCTION
AND OTHER EQUITABLE RELIEF

Plaintiff, the Federal Trade Commission ("FTC" or "the Commission"), for its complaint alleges:

1. The FTC brings this action under Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 53(b), to secure preliminary and permanent injunctive relief, rescission or reformation of contracts, restitution, disgorgement, and other equitable relief for Defendants' unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

JURISDICTION AND VENUE

2. This Court has jurisdiction over this matter pursuant to 28 U.S.C.  1331, 1337(a), and 1345, and 15 U.S.C.  53(b).

3. Venue in the United States District Court for the Southern District of Florida is proper under 28 U.S.C.  1391(b) and (c), and 15 U.S.C.  53(b).

PLAINTIFF

4. Plaintiff, the Federal Trade Commission, is an independent agency of the United States Government created by statute. 15 U.S.C.  41 et seq. The Commission is charged, inter alia, with enforcement of Section 5(a) of the FTC Act, 15 U.S.C.  45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission is authorized to initiate federal district court proceedings, by its own attorneys, to enjoin violations of the FTC Act in order to secure such equitable relief as may be appropriate in each case, and to obtain consumer redress. 15 U.S.C.  53(b).

DEFENDANTS

5. Defendant FRANKLIN CREDIT SERVICES, INC. ("FRANKLIN") is a Florida corporation with its office and principal place of business located at 1617 S.E. 3rd Court, Deerfield Beach, Florida. FRANKLIN transacts or has transacted business in the Southern District of Florida.

6. Defendant AMANSCO CREDIT SERVICES, INC. ("AMANSCO") is a Florida corporation with its office and principal place of business located at 201 S.E. 15th Terrace, Suite 203, Deerfield Beach, Florida. AMANSCO transacts or has transacted business in the Southern District of Florida.

7. Defendant JAMES MICHAEL CHRISTENSEN ("CHRISTENSEN") is an officer, director or principal owner of FRANKLIN and AMANSCO. At all times material to this complaint, acting alone or in concert with others, he has formulated, directed, controlled or participated in the acts and practices set forth in this complaint. Defendant CHRISTENSEN resides and transacts or has transacted business in the Southern District of Florida.

8. The foregoing Defendants operate together as part of a common enterprise to market an advance fee loan scheme.

COMMERCE

9. At all times relevant to this complaint, the Defendants have maintained a substantial course of trade in marketing debt consolidation loans, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C.  44.

DEFENDANTS' COURSE OF CONDUCT

10. At various times since at least 1997, the Defendants have deceived consumers throughout the United States through the marketing of advance fee debt consolidation loans.

11. Defendants place advertisements in various publications throughout the United States, promoting "debt consolidation" and listing a toll-free telephone number. When consumers call the toll-free number, at various times Defendants make, or cause to be made, the following representations:

a. the Defendants are offering a debt consolidation loan;
 
b. the loan will have a low interest rate, such as 3%; and
 
c. in order to receive the loan, the consumer is required to pay a fee of $295 (hereinafter "initial fee").

12. During the telephone call, Defendants take an "application" consisting of personal information about the consumer such as the consumer's Social Security number, income, employment and debt.

13. After the telephone call, Defendants provide a document to the consumer setting forth the total amount of the debt consolidation for which the consumer is approved and the terms for repaying the loan, including the amount of the payments and the number of payments.

14. In addition, Defendants provide instructions directing the consumer to make payment of the initial fee by money order or cashier check. Defendants represent that there will be no additional cost.

15. After paying the initial fee, the consumer does not receive a debt consolidation loan or any other kind of loan.

16. Instead of a loan, the Defendants make available a bill-paying service, but only after imposing an additional previously undisclosed fee ("second fee").

17. After paying either the initial fee or both fees, the consumer eventually discovers that he or she will not be getting a loan.

VIOLATION OF SECTION 5 OF THE FTC ACT

COUNT ONE

18. In numerous instances, in connection with offers to provide debt consolidation loans to consumers, Defendants have made material representations, expressly or by implication, that consumers will receive a debt consolidation loan in return for the payment of a fee.

19. In truth and in fact, after paying the requested fee to the Defendants, consumers do not receive a debt consolidation loan or any other type of loan.

20. Therefore, the representation set forth in Paragraph 18 is false and misleading and constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

COUNT TWO

21. In numerous instances, in connection with offers to provide services to consumers, Defendants have represented, expressly or by implication, that the initial fee is the total cost to receive the Defendants' services.

22. In truth and in fact, the initial fee is not the total cost to receive the Defendants' services. Defendants charge consumers additional fees before providing their services.

23. Therefore, the representation set forth in Paragraph 21 is false and misleading and constitutes a deceptive act or practice in violation of Section 5(a) of the FTC Act, 15 U.S.C.  45(a).

CONSUMER INJURY

24. Consumers throughout the United States have suffered and continue to suffer substantial monetary loss as a result of the Defendants' unlawful acts or practices. In addition, the Defendants have been unjustly enriched as a result of their unlawful acts or practices. Absent injunctive relief by this Court, the Defendants are likely to continue to injure consumers, reap unjust enrichment, and harm the public interest.

THIS COURT'S POWER TO GRANT RELIEF

25. Section 13(b) of the FTC Act, 15 U.S.C.  53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement, and restitution, to prevent and remedy any violations of any provision of law enforced by the Commission.

26. This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by the Defendants' law violations.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff Federal Trade Commission requests that this Court, pursuant to Section 13(b) of the FTC Act, 15 U.S.C.  53(b), and the Court's own equitable powers:

(a) Award Plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action and to preserve the possibility of effective final relief;
 
(b) Permanently enjoin Defendants from violating the FTC Act;
 
(c) Award such relief as the Court finds necessary to redress injury to consumers resulting from Defendants' violations of the FTC Act, including, but not limited to, rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies; and
 
(d) Award Plaintiff the costs of bringing this action, as well as such other and additional relief as the Court may determine to be just and proper.

Respectfully submitted,

Debra A. Valentine
General Counsel

Anthony E. DiResta
Regional Director

______________________________
Chris M. Couillou
Cindy A. Liebes
Attorneys for Plaintiff
Federal Trade Commission
60 Forsyth Street, S.W., Suite 5M35
Atlanta, Georgia 30303
(404) 656-1353
(404) 656-1379 (FAX)