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A credit counseling service and related companies and individuals have agreed to pay $926,754 in consumer redress and civil penalties to settle Federal Trade Commission charges that they made false claims about their debt management program and violated the FTC’s Do Not Call Rule.

According to the FTC, Credit Foundation of America, Inc. (CFA), and its associates sold debt management services nationwide through unsolicited, pre-recorded messages left on home telephones, falsely claiming that consumers were pre-approved for a program to consolidate their credit card debts to a single monthly payment at a much lower interest rate. When consumers responded to the calls, they were encouraged to enroll in a debt management plan, regardless of their individual circumstances. Many enrollees were not appropriate candidates for debt management plans and lost the large enrollment fees the defendants charged.

“When it comes to debt-related problems, a ‘one-size fits all’ solution should raise a red flag,” said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. “Debt management programs work best when they are tailored to consumers’ particular circumstances.”

In marketing its debt management program, CFA also intruded on the privacy of millions of people who did not wish to be called. The FTC alleges that CFA solicited prospective clients primarily through auto-dialing equipment that delivered prerecorded messages, placing more than three million telemarketing calls each week. Many of the consumers called had placed their names on the National Do Not Call Registry. Others had futilely requested to be placed on CFA’s in-house do not call list.

According to the complaint, although CFA claimed to be exempt from the do-not-call requirements of the FTC’s Telemarketing Sales Rule (TSR) because of its tax-exempt status with the Internal Revenue Service, CFA mainly generated profits for related for-profit companies and individuals. Therefore, it is subject to FTC jurisdiction and must comply with the TSR, regardless of the form of its corporate organization.

The complaint charges CFA with acting as part of a for-profit enterprise to generate substantial revenue from the fees paid by consumers, along with TTT Marketing Services, Inc., Sure Guard Credit Corporation, Inc., Anthony P. Cara, Todd A. Rodriguez, and Walter F. Villaume (CFA defendants). The complaint also names CFA telemarketing agents Credit Defenders of America, Inc., Credit Shelter of America, Inc., Robert Brown, and Bryan E. Taylor. The complaint alleges that the California-based defendants misrepresented that consumers were pre-approved for participation in a debt management plan with particular creditors or were guaranteed acceptance in a debt management plan at a particular interest rate or payment level by particular creditors. It further alleges that the defendants misrepresented the benefits that consumers would receive, including that the interest rates consumers paid would be reduced to as low as zero percent; that the consumers would receive debt management services before their next credit billing cycle; and that the defendants’ credit counselors would provide consumers with individualized credit counseling.

The complaint alleges that the CFA defendants violated the TSR by calling consumers on the National Do Not Call Registry and by failing to place consumers’ names on in-house do not call lists when requested. The complaint also alleges that they failed to pay for access to the Registry.

To resolve the allegations, CFA, TTT Marketing Services, Inc., Sure Guard Credit Corporation, Inc., Anthony P. Cara, Todd A. Rodriguez, and Walter F. Villaume agreed to pay $250,000 in civil penalties and $606,754 in consumer redress. Credit Defenders of America, Inc. and its owner, Robert Brown, agreed to pay $70,000 in consumer redress. Credit Shelter of America, Inc. and its owner, Bryan E. Taylor, agreed to a judgment of $102,540, which has been suspended due to their inability to pay. It will be imposed if they are found to have misrepresented their financial condition.

The settlement orders prohibit the defendants from making false claims about debt management or credit counseling programs and from engaging in abusive telemarketing practices. The defendants also agreed to standard compliance and reporting provisions that enable the FTC to monitor future compliance with the orders.

The Commission voted 5-0 to refer the complaint and orders to the Department of Justice for filing. They were filed in the U.S. District Court for the Central District of California, Southern Division.

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 defendants have actually violated the law. The case will be decided by the court. A stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Stipulated final judgments have the force of law when signed by the judge.

Copies of the complaint and consent agreements 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 thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 042-3044)

Contact Information

Media Contact:

Claudia Bourne-Farrell
Office of Public Affairs