FTC Charges Florida Company with Operating Debt Consolidation Loan Scam

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The Federal Trade Commission has charged Franklin Credit Services, Inc., Amansco Credit Services, Inc., and the companies' principal owner, James Michael Christensen, with falsely representing to consumers that they would receive a low-interest, debt consolidation loan for a one time fee of $295. Consumers never received a loan according to the FTC, and instead were offered a bill paying service that required them to pay an additional fee. At the request of the FTC, a Federal Court in Miami, Florida, has issued a restraining order temporarily halting the alleged deceptive practices and imposing an asset freeze on the defendants. A hearing on the FTC's request for a preliminary injunction against the defendants - pending trial - will be held shortly.

According to the complaint detailing the charges, the Deerfield Beach, Florida-based defendants placed advertisements in various publications throughout the United States, promoting "debt consolidation" and listed a toll-free telephone number. When consumers called, according to the complaint, the defendants made the following representations:

  • the defendants are offering a debt consolidation loan;
  • the loan will have a low interest rate, such as 3%; and
  • in order to receive the loan, the consumer is required to pay a fee of $295.

During the telephone call, the defendants took an "application" consisting of personal information about the consumer such as the consumer's Social Security number, income, employment and debt, and then provided a document to the consumer with the total amount of the debt consolidation for which the consumer was approved and the terms for repaying the loan, including the amount of the payments and the number of payments. Consumers were instructed to make payment of the initial fee by money order or cashier's check and, the complaint alleges that the defendants represented that there would be no additional cost.

The complaint charges that after having paid the initial fee, consumers did not receive a debt consolidation loan or any other kind of loan from the defendants; instead, the defendants offered consumers a bill-paying service, but only after imposing additional, previously undisclosed fees.

The FTC has asked the court to order an injunction permanently prohibiting the alleged deceptive practices, and order the defendants to pay redress to consumers.

The FTC filed its complaint, under seal, in the U.S. District Court for the Southern District of Florida, Fort Lauderdale Division, on Dec. 7. The seal was lifted this morning. The Commission vote authorizing staff to file the complaint was 4-0. This matter was handled by the FTC's Atlanta Regional Office. The FTC received substantial assistance in this case from the Florida State Comptroller's Office.

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 complaint, and consumer information about advance-fee loan scams are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(Civil Action No.: 98-7375-CIV-Gold)
(FTC File No.: 982 3550)

Contact Information

Media Contact:
Howard Shapiro
Office of Public Affairs
Staff Contact:
Chris M. Couillou or Cindy A. Liebes
Atlanta Regional Office
Suite 5M35, Midrise Bldg.,
60 Forsyth Street S.W.
Atlanta, Georgia 30303
(404)-656-1353 or (404)-656-1359