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The Federal Trade Commission has charged five Florida corporations and the three individuals that control them with violating the National Do Not Call Registry and falsely representing they provide debt consolidation services. According to the FTC’s complaint, Debt Management Foundation Services, Inc. (DMFS), which falsely claims to be a nonprofit corporation, and its affiliates have used a deceptive telemarketing campaign to mislead each consumer that enrolls with DMFS into paying hundreds of dollars in up-front fees. DMFS’s telemarketing campaign has also prompted complaints from consumers all over the country who have received calls from DMFS even though their phone numbers are on the FTC’s Do Not Call Registry. At the FTC’s request, a U.S. district court judge has issued a temporary restraining order against most of the defendants barring them from engaging in illegal activities, freezing their assets, and appointing a receiver to manage their business.

The FTC’s complaint against DMFS; One Star Marketing, Inc.; Debt Specialist of America, Inc.; Ameridebt Group, Inc.; Credit Counseling Specialists of America, Inc.; Dale Buird, Jr.; Dale Buird, Sr.; and Shawn Buird states that DMFS solicits consumers with answering machine messages that state that the consumers have been pre-approved for a credit card debt consolidation program and that they can receive interest rates of as low as one-and-one half percent through a debt reduction program. According to the FTC’s complaint, DMFS also has operated a web site on which it states that consumers can reduce the term on their debts by 50 percent and reduce or eliminate interest on their debts. DMFS allegedly claims that it will preserve and/or rebuild consumers’ credit and that it can help consumers before their next billing cycle. According to the FTC, the defendants repeatedly state that DMFS is “a nonprofit agency.” Prior to October 2003, the marketing campaign now conducted by DMFS was conducted in the name of “Debt Management Foundation” and “Ameridebt Group.”

According to the FTC, consumers who respond to DMFS’s messages or Internet advertising speak with representatives who claim that DMFS is a nonprofit company that consolidates consumer credit card debt. The representatives allegedly identify a specific, monthly payment amount that the consumer will be permitted to make if he or she consolidates debts with DMFS. The representatives allegedly tell consumers that, to receive these benefits, each consumer must pay DMFS up-front fees that run as high as $1,000, and also pay monthly fees of $20 to $49.

The FTC charges that, despite its claims, DMFS does not provide debt management services to consumers. Instead, the FTC alleges, DMFS sends consumers who pay its steep fees paperwork to apply for debt management services from another entity. Consumers who apply for services often find that the monthly payments and interest rates that DMFS quoted to them are not available.

Specifically, the complaint charges that the defendants violated the FTC Act by: (1) falsely claiming that DMFS and its predecessors would provide debt management services to consumers when, in truth, they referred consumers to a third-party for debt management services and/or provided consumers with applications from such third-parties; (2) falsely claiming that consumers who enrolled in their debt management program would receive certain benefits, including the elimination of interest charges on credit card debt or the reduction of such charges to as low as one-and-one-half percent; (3) falsely representing that DMFS would give consumers a period of time to consider the program and cancel before being obligated to pay the full enrollment fee; and (4) falsely claiming that DMFS is a nonprofit entity.

The complaint charges that DMFS has violated the Telemarketing Sales Rule by: (1) falsely claiming that consumers who enrolled in their debt management program would receive certain benefits, including the elimination of interest charges on credit card debt or the reduction of such charges to as low as one-and-one-half percent; (2) billing consumers who had not provided their express informed consent to be billed; (3) calling telephone numbers of consumers registered on the National Do Not Call Registry; and (4) failing to pay the fees that telemarketers are required to pay when initiating calls to telephone numbers that may be on the National Do Not Call Registry.

The complaint further charges the defendants with violating the Gramm-Leach-Bliley Act and the Privacy Rule by failing to provide required privacy disclosures. The complaint also alleges that the defendants violated the Credit Repair Organizations Act (CROA) by: (1) charging consumers before fully performing credit repair services; (2) charging consumers for services where the consumers have not executed written and dated contracts that include a full and detailed description of the services to be performed; (3) failing to provide consumers with the written disclosure statement and notice of right to cancel required by CROA; and (4) failing to comply with CROA’s three-day right of cancellation.

The FTC’s complaint asks the court to permanently prohibit the defendants from future illegal practices and award consumer redress.

The Commission vote authorizing staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Middle District of Florida, Tampa Division, on July 20,
2004 and the temporary restraining order was entered by the Court on the same day.

Consumers have registered more than 60 million telephone numbers on the National Do Not Call Registry. Consumers can still add their telephone numbers to the Registry by calling
1-888-382-1222 (TTY: 1-866-290-4236) or visiting

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the Commission’s complaint are available from the FTC’s Web site at 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 in English or Spanish (bilingual counselors are available to take complaints), 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 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.

(FTC File No. 042-3029)

Contact Information

Media Contact:
Jen Schwartzman,
Office of Public Affairs
Staff Contact:
Daniel Salsburg
Bureau of Consumer Protection