FTC and State of Florida Put Kibosh on Huge Debt Relief Scam

The Federal Trade Commission (FTC) announced yesterday that, together with the State of Florida, it requested that a federal court temporarily halt a massive phony debt relief operation that bilked tens of millions of dollars from financially strapped consumers, including the elderly and disabled.

According to the FTC and Florida, Jeremy Lee Marcus, Craig Davis Smith and Yisbet Segrea, through 11 companies, got people to pay hundreds or thousands of dollars a month by falsely promising they would pay, settle, or obtain dismissals of consumers’ debts and improve their credit. Over time, victims found their debts unpaid, their accounts in default, and their credit scores severely damaged – some were sued by their creditors, and some were forced into bankruptcy.

The FTC and Florida allege that the defendants falsely claimed non-profit status to appear more credible and legitimate. The defendants then promised consumers guaranteed debt consolidation loans for tens of thousands of dollars with attractive interest rates and significantly lower monthly payments than consumers were paying their creditors. Once consumers agreed to the purported loan, the defendants almost immediately debited the consumers’ bank accounts for an initial loan “repayment” or a processing fee, and then kept debiting consumers’ bank accounts each month, in amounts ranging from $200 to $1,000 or more. The FTC and Florida charge that the defendants, despite taking these monthly payments, failed to extend consumers the promised debt consolidation loans.