A federal district court judge has ordered four individuals who allegedly engaged in a nationwide advance fee loan scam to stop misrepresenting that they could get credit cards for consumers in exchange for a one-time fee, the Federal Trade Commission and Illinois Attorney General Jim Ryan announced today. The judge issued the order as part of a preliminary injunction sought by the FTC and Illinois Attorney General, which continues an existing freeze on the defendants' assets and requires them to comply with state and federal law pending the outcome of a trial on the allegations. The defendants operated from an office in Markham, Illinois, and resided in Country Club Hills, Dolton and Hazelcrest, Illinois. The case, which is the first case ever to be filed jointly by the FTC and the Illinois Attorney General, was announced as part of a nationwide crackdown on telemarketers who offered consumers guaranteed loans or credit for a fee that never arrived.
On January 7, 1998, the FTC and the Illinois Attorney General filed charges in U.S. District Court in Chicago against Darryl André (also known as Darryl A. Roberts and Darryl Jones), Angela André (also known as Angela Jones), Bryan D. Smith, and Anthony Q. Roberts. The complaint alleged that the defendants, operating under a host of assumed names, including Premier Card Services, Tower Financial Services, Prime Credit Services, Colonial Financial Services, and Consumer Express, deceptively marketed "credit cards" for an upfront fee. They sent unsolicited postcards to consumers promising approval for a major credit card with a high credit line. Consumers were told to call toll-free numbers for more information. Consumers were promised that, for a $97.50 "processing" fee, to be deducted from their checking account, they would receive a Visa or MasterCard credit card. Instead, consumers received a "Consumer Express" charge card that was only good for ordering from a mail order catalogue with high-priced specialty items. Defendants failed to tell consumers that they had to purchase over $400 worth of merchandise from the defendants' mail-order catalogue before the defendants would "sponsor" the consumers' application for a credit card.
According to the complaint, these practices violated the Federal Trade Commission Act, the FTC's Telemarketing Sales Rule, the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Credit Services Organization Act. The court granted a temporary restraining order freezing the defendants' assets the same day the case was filed.
Following a brief hearing on January 27, in Chicago, the court entered a preliminary injunction against each of the defendants. The injunction, which is nationwide in scope, prohibits defendants from violating the law and continues the freeze of their assets. The defendants consented to the injunction.
The FTC and the Attorney General acknowledge the assistance it received in this case from the United States Postal Inspection Service, Chicago Division, which provided substantial assistance in the investigation.
Copies of the preliminary injunction in this case, as well as the Commission's complaint and the news release the FTC issued when it announced the charges on January 28, are available from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-3128; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC File No. 982 3002; (Civil Action No: 98 C 0059))
FTC Chicago Regional Office
Illinois Attorney General's Office