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The Federal Trade Commission has reached a settlement with four of the defendants in an allegedly phony debt relief services operation that claimed that, for $995, it would dramatically reduce consumers' credit card interest rates. Under the settlement, reached as part of the FTC's continuing efforts against frauds that target financially strapped consumers, the defendants will be banned from robocalling consumers and from selling debt relief services. The operation, based in Canada and New York, used telemarketing boiler rooms in Orlando, Florida, to defraud consumers. Although the defendants operated under several different names, they often used "AFL Financial Services," or variations of the name "AFL."

According to the FTC's complaint, F&F Payment Processing Inc., Bajada Management Group Inc., Baird B. Fisher, Jacqueline M. Fisher, and others used illegal robocalls and falsely promised refunds to consumers if they did not save at least $2,500 as a result of lowered credit card interest rates. Based on records obtained by the FTC, the operation took in over $13 million from more than 13,000 consumers. When the case was filed, the court halted the operation and froze the defendants' assets pending a trial.

As alleged in the complaint, the defendants claimed they would negotiate lower credit card interest rates. At most, the defendants sometimes telephoned credit card issuers and attempted to conduct three-way calls among the credit card company, the consumer, and one of the defendants' so-called financial representatives. Often the defendants did not make these calls at all. When they did, the calls were unsuccessful. Some credit card issuers refused to participate in the calls as a matter of policy. Instead of a reduction in interest rates, consumers, who were already in dire financial straits, found themselves saddled with an additional $995 credit card charge.

In addition to banning the defendants from delivering prerecorded messages and selling debt relief services, the proposed settlement order permanently prohibits the companies and their owners from:

  • making misrepresentations about any goods or services, including anyone's ability to obtain a loan modification or improve a consumer's credit rating;
  • misrepresenting the terms of any refund or cancellation policy, affiliation with any government or non-profit program, or that a consumer will receive legal representation;
  • violating the FTC's Telemarketing Sales Rule;
  • illegally calling numbers on the National Do Not Call Registry, or abandoning calls without involving a live operator; and
  • failing to transmit caller identification, and failing to disclose the seller's identity and the call's purpose.

In addition, the settlement prohibits the defendants from selling or otherwise benefitting from customers' personal information, from failing to properly dispose of customers' personal information within 30 days, and from failing to monitor sales personnel for compliance with the order. The order also imposes a judgment of more than $13.1 million, which will be suspended upon payment of $159,000 by the defendants who are part of the settlement. Additional funds are expected from the court-appointed receiver's sale of the defendants' assets in the U.S. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition or fail to meet the terms of the order. The other four defendants named in the complaint are in default.

The FTC brought this case in cooperation with the Ministry of the Attorney General of Ontario, Civil Remedies for Illicit Activities Office. The Ministry simultaneously filed a separate lawsuit in Ontario seeking assets for consumer redress to victims in the United States and Canada.

The FTC also worked cooperatively with the Florida Department of Agriculture and Consumer Services and the Toronto Strategic Partnership in bringing this case. The Toronto Strategic Partnership members include the United States Postal Inspection Service, the Competition Bureau Canada, the Toronto Police Service Fraud Squad - Mass Marketing Section, the Ontario Provincial Police Anti-Rackets Section, the Ontario Ministry of Consumer Services, the Royal Canadian Mounted Police, and the United Kingdom's Office of Fair Trading.

The FTC thanks Bank of America and the Better Business Bureau for their assistance.

The Commission vote approving the proposed consent order was 4-0. The order was entered by the U.S. District Court for the Northern District of Illinois, Eastern Division on January 25, 2012.

For more information about this kind of deception, read Credit Card Interest Rate Reduction Scams.

NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers 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, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. X110003)

Contact Information

Frank Dorman
Office of Public Affairs