UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

FEDERAL TRADE COMMISSION, and STATE OF NEVADA ex rel. FRANKIE SUE DEL PAPA, ATTORNEY GENERAL,

Plaintiffs,

v.

CONSUMER CREDIT SERVICES, INC., a Nevada corporation; and ERIC A. PETERSEN, individually and as an officer of Consumer Credit Services, Inc.

Defendants.

CIVIL ACTION NO.

STIPULATED FINAL
JUDGMENT AND ORDER
FOR PERMANENT INJUNCTION
AND CONSUMER REDRESS

Plaintiffs, the Federal Trade Commission and the State of Nevada (“Plaintiffs”), have filed their complaint pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, the Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. § 6101 et seq., and the Nevada Deceptive Trade Practices Act, NRS § 598, charging Defendants Consumer Credit Services, Inc. and Eric A. Petersen in this action with violations of Section 5 of the FTC Act, 15 U.S.C. § 45, the FTC's Trade Regulation Rule entitled the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the Nevada Deceptive Trade Practices Act, NRS § 598.

Plaintiffs and Defendants have agreed to the entry of this Stipulated Final Judgment and Order for Permanent Injunction and Consumer Redress ("Order") by this Court in order to resolve all matters of dispute between them in this action.

NOW, THEREFORE, Plaintiffs and Defendants having requested the Court to enter this Order, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:

FINDINGS

1. This Court has jurisdiction of the subject matter of this case and of the parties consenting hereto.
2. This is an action by the Plaintiffs instituted under Sections 13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, the Telemarketing Act, 15 U.S.C. § 6101 et seq., and the Nevada Deceptive Trade Practices Act, NRS § 598. Pursuant to these sections of the FTC Act, the Telemarketing Act, and the Nevada Deceptive Trade Practices Act, Plaintiffs have the authority to seek the relief they have requested.
3. The Complaint states a claim upon which relief may be granted against Defendants under Sections 5 and 19 of the FTC Act, 15 U.S.C. §§ 45 and 57b, the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the Nevada Deceptive Trade Practices Act, NRS § 598.
4. Plaintiffs, by and through their counsel, and defendants, by and through their counsel, have agreed to entry of this Order by this Court, without trial or adjudication of any issue of fact or law, and without an admission of any allegation or offense charged in the Complaint. Defendants declare that, prior to, and in connection with, the execution of this Order, they have been apprised of sufficient information, either through experts, legal counsel or other sources of their own selection, so as to exercise their judgment intelligently in deciding whether to execute this Order.
5. The parties hereto each state that this Order is executed voluntarily and with full knowledge of its significance and legal effect.
6. The parties agree that this Order shall stand as settlement in full of all claims against defendants, as alleged in the Complaint. Plaintiffs, however, retain the right to enforce the terms of the Order. For purposes of N.R.S. §598.0999, this Order shall be deemed an Order of the Court. This Court retains jurisdiction of this matter for purposes of construction, modification and enforcement of this Order. Defendants have waived all rights to seek appellate review of, or otherwise challenge or contest the validity of, this Order.
7. Defendants have waived all claims under the Equal Access to Justice Act, 28 U.S.C. § 2412.
8. Entry of this Order is in the public interest.

DEFINITIONS

A. "Assets" means any legal or equitable interest in, right to, or claim to, any real and personal property, including but not limited to chattels, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, mail or other deliveries, inventory, checks, notes, accounts, credits, receivables, and all cash, wherever located.

B. "Document" is synonymous in meaning and equal in scope to the usage of the term in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and other data compilations from which information can be obtained and translated, if necessary, through detection devices into reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term.

C. “Customer” means any person who is or may be required to pay for goods or services offered through telemarketing.

D. “Material” means likely to affect a person’s choice of, or conduct regarding, goods or services.

E. “Person” means any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.

F. “Seller” means any person who, in connection with a telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services to the customer in exchange for consideration.

G. “Telemarketer” means any person who, in connection with telemarketing, initiates or receives telephone calls to or from a customer.

H. “Telemarketing” means a plan, program, or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones and which involves more than one interstate telephone call. The term does not include the solicitation of sales through the mailing of a catalog, provided such solicitation meets the requirements of Section 310.2(u) of the Telemarketing Sales Rule, 16 C.F.R. § 310.2(u).

I. Unless otherwise indicated, “defendants” refers to defendant Consumer Credit Services, Inc. and defendant Eric A. Petersen.

PROHIBITED BUSINESS ACTIVITIES

This Order having been reviewed by the Court and having been found to have been entered into in good faith and to be in all respects just, reasonable, equitable, and adequate to protect the public from the occurrence in the future of the conduct alleged in the Complaint,

I.

IT IS THEREFORE ORDERED that Defendants, Consumer Credit Services, Inc. and Eric A. Petersen, and their officers, agents, servants, employees, attorneys, and all persons or entities directly or indirectly under their control or under common control with them, and all other persons or entities in active concert or participation with them, are hereby permanently restrained and enjoined from:

A. Misrepresenting that consumers will receive:

1. an unsecured credit line of any stated amount without restrictions;
2. cash advances of $2,500 or any other stated amount; or
3. a credit card that is represented to be a general credit card, or that can be used to purchase goods and services from numerous merchants;

B. Misrepresenting their abilities to obtain or to provide credit cards, lines of credit, cash advances, or other extensions of credit to or for consumers regardless of the consumers’ credit histories;

C. Misrepresenting that consumers can obtain unsecured Visa or MasterCard credit cards;

D. Violating the Telemarketing Sales Rule, 16 C.F.R. Part 310, and the Nevada Deceptive Trade Practices Act, N.R.S. § 598.0903 et seq., including but not limited to:

1. Violating Section 310.4(a)(4) of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(a)(4), and the Nevada Trade Practices Act, NRS § 598.282,” by requesting or receiving payment of any fee or consideration in advance of obtaining a loan or other extension of credit when Defendants have guaranteed or represented a high likelihood of success in obtaining or arranging a loan or other extension of credit for a person; and
2. Violating Section 310.3(a)(1) of the Telemarketing Sales Rule, 16 C.F.R. §310.3(a)(1) and the Nevada Deceptive Trade Practices Act, NRS § 598.0923(2), by failing to disclose, in a clear and conspicuous manner, before a customer pays for goods or services that are subject of the sales offer, all material restrictions, limitations, or conditions to receive the goods or services that are the subject of the sales offer.

E Operating as a credit service organization, as such term is defined by the Nevada Deceptive Trade Practices Act, NRS Chapter 598.281(5), without duly registering and posting the required bond or other security with the Nevada Consumer Affairs Division, as provided by the Nevada Deceptive Trade Practices Act, NRS Chapter 598.

REDRESS

II.

IT IS FURTHER ORDERED that Defendant Consumer Credit Services, Inc. and Defendant Petersen shall, jointly and severally, pay to the Office of the Attorney General of Nevada the sum of Five Thousand dollars ($5,000). Payment shall be due no later than three days after the date of entry of this Order. In the event of any default on any obligation to make payment under this Part, interest, computed pursuant to 28 U.S.C. § 1961(a), shall accrue from the date of default to the date of payment.

III.

The funds paid by Defendants Pursuant to Part II shall be deposited into a redress fund, administered by the Plaintiffs, to be used for equitable relief including but not limited to consumer redress and any attendant expenses for the administration of any redress fund. The Plaintiffs in their sole discretion may use a designated agent to administer consumer redress. If the Plaintiffs determine, in their sole discretion, that redress to purchasers is wholly or partially impracticable, any funds not so used shall be paid to the United States Treasury or to the Office of the Attorney General of Nevada in lieu of redress. The Plaintiffs and Defendants acknowledge and agree that this judgment for equitable monetary relief is solely remedial in nature and is not a fine, penalty, punitive assessment, or forfeiture.

IV.

IT IS FURTHER ORDERED that the Plaintiffs’ agreement to this Order is expressly premised upon the truthfulness, accuracy and completeness of the Defendants’ Financial Statements executed on November 14, 1997 (for Defendant Petersen) and dated October 31, 1997 (for CCS), which contain material information upon which the Plaintiffs relied in negotiating and agreeing to this Order. If, upon motion by Plaintiffs, this Court finds that these Financial Statements failed to disclose any material asset, or materially misrepresented the value of any asset, or contained any other material misrepresentation or omission, the Plaintiffs may request that the Order herein be reopened for the purpose of providing for the payment by Defendants of redress to purchasers of Defendants' services; provided, however, that in all other respects this Order shall remain in full force and effect unless otherwise ordered by the Court; and provided further, that proceedings instituted under this Paragraph are in addition to and not in lieu of any other civil or criminal remedies as may be provided by law, including any other proceedings the Plaintiffs may initiate to enforce this Order. Solely for the purposes of reopening and enforcing this Order under this Paragraph, Defendants waive any right to contest any of the allegations in the complaint filed in this matter.

MONITORING PROVISIONS

V.

IT IS FURTHER ORDERED that, in order to facilitate the Plaintiffs’ monitoring of compliance with the provisions of this permanent injunction, the Defendants shall, for three (3) years after the date of entry of this Order:

A. Notify the Plaintiffs in writing, within thirty (30) days after service of this Order, of his current home address, and employment status, including the name and business address of his current employer, if any;

B. Notify the Plaintiffs in writing within thirty (30) days of any change in his home address or telephone number and provide such new address and telephone number;

C. Notify the Plaintiffs in writing within thirty (30) days of any change in employment status; such notice shall include the name, address, and telephone number of his new employer, a statement of the nature of the business of his employer, and statements of duties and responsibilities in connection with the business;

D. Notify the Plaintiffs in writing within (30) days of any change in the structure of any business entity owned or controlled by either Defendant, such as creation, incorporation, dissolution, assignment, sale, creation or dissolution of subsidiaries, or any other changes that may affect compliance obligations arising out of this Order;

E. Upon reasonable written notice from the Plaintiffs, permit duly authorized representatives of the Plaintiffs access during normal business hours to the offices of any company under the control of either Defendant, wherever located, to inspect and to copy all documents belonging to either of them and all documents of any company owned or controlled by either of them in whole or in part, relating in any way to any conduct subject to this Order;

F. Refrain from interfering with duly authorized representatives of the Plaintiffs who wish to interview upon reasonable written notice, the employers, agents, and employees of Defendants (who may have counsel present) relating in any way to any conduct subject to this Order;

G. Within ten (10) days of the entry of this Order, provide to all current employees who are engaged in the selling or are offering to sell credit services or credit products a copy of this Order and secure from each such employee a signed, dated statement, in writing, acknowledging receipt of such copy, which statement shall be maintained and made available to the Plaintiffs for inspection and copying upon request; and

H. Within ten (10) days of their first day of employment, deliver to all future employees who are engaged in selling or are offering to sell credit services or credit products a copy of this Order and secure from each such employee a signed, dated statement, in writing, acknowledging receipt of such copy, which statement shall be maintained and made available to the Plaintiffs for inspection and copying upon request.

Provided further, that the Plaintiffs may otherwise monitor Defendants’ compliance with this Order by all lawful means available, including but not limited to the use of investigators posing as consumers, potential investors, suppliers and other entities.

VI.

IT IS FURTHER ORDERED that Defendants, for three (3) years after the last date of dissemination of all advertisements and promotional materials relating to practices covered by this Order, maintain and upon request make available to the Plaintiffs for inspection and copying:

A. Said advertisements and promotional materials; and

B. All lists of purchasers of credit services or credit products.

VII.

IT IS FURTHER ORDERED that all notices required of the Defendants shall be sent to:

Jane D. Femiano, Esq.
The Office of the Attorney General
555 E. Washington Ave, Suite 3900
Las Vegas, NV 89101

or to such other address to which the parties may subsequently agree.

VIII.

IT IS FURTHER ORDERED that, within sixty (60) days after the date of entry of this Order, Defendants shall file a report with the Plaintiffs setting forth the manner and form in which they have complied with this Order.

MISCELLANEOUS PROVISIONS

IX.

Each party to this Order hereby agrees to bear its own costs and attorney fees incurred in connection with this action.

X.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for all purposes.

XI.

The parties agree and stipulate to entry of the foregoing Order as a Final Judgment in this action.

Dated:

IT IS SO ORDERED, this _____ day of _____________, 1997.