New Jersey Defendants Settle FTC Charges of Operating Advance Fee Loan Scam;

Agree to Pay $239,793 in Consumer Redress

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Financial Services of North America, Inc., operating out of New Jersey, and Bernard Rann and Anthony Camporeale, have agreed to pay $239,793 for consumer redress as part of a settlement with the Federal Trade Commission to resolve allegations that they engaged in the deceptive telemarketing of advance fee VISA or MasterCard credit cards. The defendants claimed that for a $99 fee, consumers with credit problems were guaranteed to obtain major credit cards. Instead of receiving the promised credit cards, however, consumers received a membership in the "Diamond Club," a merchandise-purchasing club. In addition to paying consumer redress, the proposed settlement would prohibit the defendants from misrepresenting any fact material to a consumer's decision to purchase any good or service.

The defendants were named as part of "Operation Advance Fee Loan 2000," an aggressive law enforcement sweep targeting corporations and individuals that falsely promised consumers loans and credit cards for an advance fee. It is a violation of federal law to request or receive a fee from a consumer in advance of obtaining or arranging a loan or other extension of credit when the seller has guaranteed or represented a high likelihood of success in obtaining or arranging for a loan or extension of credit.

The FTC filed its complaint in June 2000 in federal court alleging that the defendants violated the FTC Act and the Telemarketing Sales Rule (TSR) by misrepresenting, among other things, that after paying defendants a $99 advance fee, consumers would receive a major credit card. Instead of delivering the promised credit cards, the defendants mailed consumers a letter welcoming them to a merchandise-purchasing club. The defendants also sent consumers a credit card application to a South Dakota bank, which often required consumers to pay additional application fees. Further, the complaint alleged, the defendants debited many consumers' bank accounts without their authorization, and, in other instances, they debited consumers' accounts in amounts exceeding the amounts authorized by the consumers.

The proposed stipulated final judgment to settle the charges, which requires the court's approval, would prohibit the defendants from misrepresenting:

That consumers who pay an advance fee could reasonably expect to receive a credit card or other extension of credit;

That consumers' checking accounts would not be debited either without their authorization or in an excessive amount; and any fact material to a consumer's decision to purchase any good or service.

The proposed settlement also would prohibit the defendants from violating, or assisting others to violate, the TSR, and from selling their customer lists. In addition, the proposed settlement would require the defendants to pay $239,793 in consumer redress. Finally, the settlement contains various record keeping and reporting requirements to assist the FTC in monitoring the defendants' compliance.

The Commission vote to authorize staff to file the proposed stipulated final judgment and order was 5-0. It was filed in the U.S. District Court, District of New Jersey, in Trenton, and signed by the judge on October 31, 2001. The FTC's Northeast Regional Office handled the investigation.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the stipulated final judgment and order 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, 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 hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC Matter No. X000079)
(Civil Action No. 002-2792 (GEB)

Contact Information

Brenda Mack,
Office of Public Affairs
Barbara Anthony or Robin Eichen
Northeast Region - New York