Florida Defendants to Pay $700,000 in Redress for Alleged Misrepresentations Related to the Telemarketing Of Worthless Credit Card Protection

Complaint Filed in October 2000 as Part of FTC's "Operation Protection Deception" Sweep

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An Orlando, Florida-based company doing business as Advanced Consumer Services (ACS) and its principals caught up in the Federal Trade Commission's 2000 "Operation Protection Deception" law enforcement sweep will pay approximately $700,000 to settle charges that they made misrepresentations when telemarketing worthless credit card "protection" packages to consumers. The payment is the largest redress settlement to date obtained by the Commission in a credit card protection fraud case. In addition, defendants Anthony and Tracy Andrews will be permanently banned from selling credit card protection or any credit-related goods or services.

According to the FTC, ACS used telemarketers to contact consumers, falsely claiming that they were calling on behalf of the consumers' credit card issuers or a government agency. They would then claim that criminals were using the Internet to steal consumers' credit card numbers, and that consumers would be held fully liable for any unsubstantiated charges made by such online thieves. The defendants claimed that consumers would be covered in case of such theft if they purchased the defendants' credit card "protection." They offered the protection on an unconditional basis, with an unconditional money-back guarantee. In truth, all of these claims were misrepresentations, the FTC stated. Additionally, the Commission charged, ACS occasionally obtained the consumers' credit card numbers and charged them for the "protection" package whether they wanted it or not. Under federal law, consumers are covered for all but $50 of any unauthorized charges made to a credit card account and $500 for unauthorized debits to a debit card account.

The stipulated judgment and order for permanent injunction announced today were reached with the individual defendants and corporate defendants TNT Talks, Inc., and Least Cost Utilities, Inc., all of which were doing business as Advanced Consumer Services. Through the order, which requires approval of the federal district court, the individual and corporate defendants have settled allegations that their actions violated the FTC Act and the Telemarketing Sales Rule (TSR).

Terms of the Stipulated Final Order

Under the terms of the stipulated final order, the defendants will be required to post a $300,000 performance bond before conducting any telemarketing activities. This bond requirement is designed to ensure that consumers are protected from misleading practices if the defendants decide to telemarket any other products or services in the future.

Next, the order contains terms specifically designed to stop the defendants from making similar misrepresentations or violating the law in the future. For example, they will be prohibited from misrepresenting: 1) that they are calling from, or on behalf of, consumers' credit card issuers or a government agency; 2) that consumers could be held liable for any unauthorized charges to their credit card accounts; 3) that consumers had agreed to the purchases for which their card was debited; and 4) that the defendants will provide unconditional and/or unrestricted refunds. The order also contains language prohibiting the defendants from misrepresenting any fact material to a consumer's purchasing decision, and from violating the TSR.

Further, the order provides that the defendants will pay consumer redress totaling approximately $700,000, including more than $630,000 in currently frozen assets and between $60,000 and $80,000 from the sale of a condominium in Orlando, Florida. The order also contains a $2 million suspended judgment against the defendants, which would be due if they are found to have misrepresented their financial condition.

Finally, the order lifts the freeze on the individuals' and the company's assets, prohibits them from transferring their customer lists and contains standard monitoring, compliance, and record-keeping provisions.

The FTC would like to thank the Central Florida Better Business Bureau and the Florida Attorney General’s Office for their help with the investigation and resolution of this matter.

The Commission vote to file the stipulated final judgment and order for permanent injunction was 5-0. It was filed in the U.S. District Court for the Middle District of Florida, Orlando Division, on April 17, 2002.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated final orders have the force of law when signed by the judge.

Copies of the Commission's stipulated final judgment and order for permanent injunction 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. 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 http://www.ftc.gov. 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 File No. X010015)
(Civ. No. 6:00-CV-1410-ORL-28-B)

Contact Information

Media Contact:
Mitchell J. Katz,
Office of Public Affairs
Staff Contact:
Barbara Anthony, Director,
FTC Northeast Region