The US Federal Trade Commission
(FTC) has settled charges against a debt release operation
that allegedly charged customers thousands of dollars in up-front
fees which often left them further in debt.
The settlement comes a year after the FTC made
changes to its Telemarketing Sales Rule.
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The rule prohibits companies that sell
debt relief services over the telephone from charging fees before
they settle or reduce a customer’s credit card or other unsecured
debt.
The rule is one aspect of the FTC’s
continuing crackdown on scams that target consumers in financial
distress.
The proposed FTC settlement means Debt Relief
USA can no longer do business and company principals James Wojcik
and Valerie Leath can no longer market or sell any financial
products or services. Litigation continues against the two other
principals Kelly Reilly and Alvin Bell.
According to the complaints received by the
FTC, Debt Relief USA and its principals made deceptive claims to
the consumers that enrolled in the programme claiming they could
reduce 40% to 60% of their credit card debt in 24 to 48 months.
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By GlobalDataFew of their consumers received these
results.
