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The Federal Trade Commission today charged four companies and their principals, Miriam and Robert Lovinger, with deceptively marketing a “debt settlement” operation that allegedly failed to provide services it claimed would reduce consumers’ debt, resulting in even more debt for many consumers. The FTC has requested an expedited hearing for a temporary restraining order.

According to the FTC’s complaint, since at least 2000 the defendants have sold debt settlement services through the Web sites,,, and, offering a “Debt Meltdown Program” they describe as “an aggressive method of helping consumers out of the debt trap and away from the bankruptcy path.” They claim they will negotiate with creditors to enable consumers “to escape debt at a fraction of the total amount they owe,” that consumers end up repaying only “60 cents for every dollar that is owed,” and that “we can reduce your unsecured debt by up to 60 percent and sometimes more and have you debt free in 18 to 30 months.”

The complaint alleges that consumers who call the defendants’ toll-free number are told that the defendants will obtain settlements that will substantially reduce their debt. The defendants allegedly promise to negotiate with creditors and begin making payments to them within several weeks after consumers join their program, and to provide personalized financial counseling. As noted in the complaint, consumers allegedly are told to set up a direct debit from their checking account for deposit into a bank account established by the defendants, who will debit their fees and pay creditors. They also are told to have no further contact with their creditors, and to stop paying them immediately, enabling the defendants to negotiate for them.

The defendants allegedly often fail to contact each creditor as promised, and consumers often continue hearing from creditors about their debts. According to the complaint, in someinstances the defendants fail to negotiate settlements with all of consumers’ creditors and don’t pay them, resulting in wage garnishment or debt collection agency action. When consumers tell the defendants that they have received a creditor’s summons, they allegedly are told not to worry, that it is just a “scare tactic.” In some instances, the complaint states, creditors sue these consumers, who have to pay the cost of the creditors’ litigation.

The complaint alleges that, as a result of being in the defendants’ program, many consumers experience substantially increased debt because of late fees, finance charges, and overdraft charges, and suffer damage to their credit rating because of significant negative information such as late payments, charge-offs, collections, and garnishments, all of which may appear on their credit report for up to seven years.

The defendants are charged with violating the FTC Act by allegedly misrepresenting that consumers who purchase their services will be able to pay off all of their debts referred to the defendants’ program for a substantially reduced amount, that the defendants will negotiate settlements with creditors and begin paying them within several weeks after consumers join the program, and that they will provide one-on-one financial consulting.

On October 4, the court will hold a hearing requiring the defendants to show cause why a temporary restraining order barring misrepresentations, appointing a temporary receiver, and freezing the assets of Edge Solutions, Inc. of Delaware, Edge Solutions Inc. of New York, and Money Cares, Inc., all a/k/a The Debt Settlement Company and a/k/a The Debt Elimination Center; Pay Help, Inc.; and Miriam Lovinger and Robert Lovinger should not be entered. The FTC will seek to permanently bar the defendants from further violations and make them forfeit their ill-gotten gains.

The FTC thanks its partner, the Better Business Bureau Serving Metropolitan New York, for its assistance in bringing this case.

By a 5-0 vote, the Commission approved the filing of the complaint in the U.S. District Court for the Eastern District of New York, which occurred on October 1, 2007.

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.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click

Contact Information

Frank Dorman
Office of Public Affairs
Thomas A. Cohn, Regional Director
Carole Paynter, Ann Weintraub, or Nur-ul-Haq, Attorneys
Northeast Regional Office