The Federal Trade Commission has continued its crackdown on illegal robocallers, with two more companies agreeing to settle charges that they used prerecorded calls to trick consumers into deceptive credit card interest rate reduction scams.
Under separate proposed settlements, the defendants behind Treasure Your Success and Ambrosia Web Design will be banned from telemarketing and delivering robocalls. They also will be permanently prohibited from advertising, marketing, promoting, or offering for sale any debt relief product or service, or assisting others in doing so.
The FTC filed the initial cases against the operators of both companies in 2012 as part of a joint-agency crackdown on companies and individuals responsible for making millions of illegal “Rachel” robocalls pitching credit card rate-reduction services.
In its original complaint against Treasure Your Success, the FTC alleged that the defendants tricked consumers into paying up-front fees for as much as $1,593, using deceptive offers for credit card interest rate reduction services.
The complaint named two individuals, Willy Plancher and Valbona Toska, as well as their three companies, WV Universal Management, Global Financial Assist, and Leading Production. The defendants began marketing credit card interest rate reduction services in 2010. According to the FTC’s complaint, the defendants lured consumers by telling them they could substantially reduce their credit card interest rates, down to as low as three percent, in many instances. After collecting the upfront fees, however, consumers typically failed to get any interest rate reduction or any savings at all.
In November 2012, at the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending further court proceedings. The FTC subsequently amended its complaint to include new defendants and additional counts.
In addition to the other provisions of the settlement, the proposed order holds the defendants liable for $2,032,626, based on the amount of consumer injury in the case. Due to the inability of the individual defendants to pay redress, the monetary judgment has been suspended. However, if the defendants misstate or fail to disclose any of their material assets, the full amount of the judgment will be immediately due and payable.
The case against Treasure Your Success was filed in the U.S. District Court for the Middle District of Florida, Orlando Division. Litigation continues against: HES Merchant Services Company, Business First Solutions, VoiceOnyx Corp., Hal E. Smith, Jonathon E. Warren, Ramon Sanchez-Ortega, Universal Processing Services of Wisconsin, and Derek Depuydt.
According to the FTC’s complaint, the Ambrosia Web Design defendants delivered prerecorded calls that urged consumers they called to “press one” if they were interested in credit card interest rate reduction services. Consumers who pressed one were connected to a telemarketer who promised to get them very low interest rates or, in some cases, specific amounts of interest savings. The defendants often deceived consumers into thinking defendants were affiliated with a government program. If consumers agreed to sign up, the telemarketer got their credit card information, often charging an illegal advance fee before providing any service, the FTC alleged.
The FTC alleged that defendants then typically failed to deliver on their promises. In addition, the FTC charged defendants with failing to disclose their purported no-refund/no cancellation policy and billing some consumers without their express authorization. Finally, the FTC alleged defendants illegally called many phone numbers on the National Do Not Call Registry.
In June 2013, the FTC amended its original complaint to add charges of credit card laundering in violation of the agency’s Telemarketing Sales Rule. According to the FTC, in many cases, the defendants laundered credit card payments by processing them for other telemarketers through the Ambrosia defendants’ own merchant accounts; and arranging for other merchants to process credit card payments for the defendants through their accounts.
In addition to the bans on outbound telemarketing and robocalling, the proposed settlement order:
Bans the defendants from using certain payment processing methods, such as remotely created checks, that are often used to conduct fraud;
Prohibits the defendants from making misrepresentations regarding any “financial products or services;” and
Prohibits the defendants from misrepresenting the efficacy of a product or service.
The proposed settlement requires the defendants to liquidate virtually all of their assets, including a valuable watch and a sports memorabilia collection. It also includes a judgment of $8.3 million, which will be suspended if defendants comply with the terms of the settlement.
The settlement resolves the FTC’s charges against: 1) Ambrosia Web Design, LLC, also doing business as AWD; 2) Concord Financial Advisors LLC; 3) CAM Services Direct LLC; 4) AFB LLC; 5) Western GPS LLC; 6) Chris Ambrosia, individually and as a manager of Ambrosia Web Design LLC and CAM Services Direct LLC; and 6) LeRoy Castine, also known as Lee Castine, individually and as a manager of Ambrosia Web Design LLC, Concord Financial Advisors LLC, AFB LLC, and Western GPS LLC.
The case against Ambrosia Web Design was filed in the U.S. District Court for the District of Arizona.