Defendants Charged with Operating an Advance Fee Credit Card Scam
A federal district court has temporarily halted the business practices of Tampa-based Peoples Credit First, LLC, Consumer Preferred, LLC (formerly known as Consumer First, LLC), and their principals Shaun Olmstead and Julie Connell, for allegedly operating an advance fee credit card scam. The Federal Trade Commission filed charges against the defendants citing that they violated the FTC Act by representing expressly or by implication that consumers were likely to receive unsecured, a major credit card, like a Visa or MasterCard, in exchange for an advance fee payment. The FTC obtained a temporary restraining order with an asset freeze and other equitable relief. The court appointed Mark Bernet as the receiver.
The FTC alleges that the defendants’ fraudulent business practices resulted in injury to thousands of consumers throughout the United States. According to the FTC, the defendants mail letters to consumers that promise a “platinum card” with a $5000 credit limit and no initial “APR” for a $45 fee, or $49 for “rush delivery.” The defendants’ letters carry the distinctive title “ACCEPTANCE CERTIFICATE” and inform consumers that they already have been approved to receive the platinum card with the substantial credit line. The defendants’ letter allegedly also states that no application or credit check is necessary as long as they sign the acceptance certificate and return it along with a check or money order. The FTC alleges that these solicitations led consumers to believe that they would receive a major credit card, like a Visa or MasterCard. Instead, what they allegedly received was a package that contained a merchandise catalogue, a brochure describing how to order from the catalogue, and a thin, plastic card with the consumers’ name and an account number on it. After receiving the package of materials, many consumers had difficulty contacting the defendants to cancel, and those who were able to contact the defendants were denied refunds or told that they were no longer entitled to a refund, the FTC alleges.
The FTC’s Southeast Region - Atlanta received valuable assistance in its investigation from the United States Post Office, Kevin Gonzalez, and the Office of Financial Institutions and Securities Regulation, Captain Marsicano, and the Hillsboro County Sheriff’s Office and its Consumer Protection Agency.
The Commission vote authorizing staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Middle District of Florida, Tampa Division, on November 10, 2003.
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 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.
Office of Public Affairs
Valerie Verduce or Ronald Laitsch
FTC Southeast Region - Atlanta
404-656-1355 or 404-656-1358
(FTC File No. 032 3079)
(Civil Action No. 8 03 CV 2353 T17JBM)