The Federal Trade Commission (FTC) and the Florida Attorney General (AG) have jointly filed a complaint in a Florida federal court against several companies and their individual owners alleging that the defendants engaged in a debt relief telemarketing scam.

The complaint alleges violations of the FTC Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). In support of their accompanying request for a temporary restraining order, asset freeze, and appointment of a receiver, the FTC and Florida AG also charged that the defendants’ alleged conduct was “particularly egregious” because it systematically targeted elderly consumers.

The FTC and AG’s request for relief was granted, with the court’s order also directing the defendants to show cause why a preliminary injunction should not be issued. In the complaint, the FTC and AG seek permanent injunctive relief, consumer redress (such as rescission or reformation of contracts, restitution, refunds, and disgorgement), and civil penalties under the FDUTPA.

According to the complaint, the defendants’ unlawful actions included the following:

  • Falsely representing that the purchase of defendants’ credit card rate reduction services would result in substantial interest rate reductions, thousands of dollars in savings, and faster repayment of debts

  • Falsely representing an affiliation with credit card issuers

  • Making unauthorized charges to consumers’ credit cards for fees

  • Making calls to consumers whose telephone numbers were listed on the National Do Not Call Registry and failing to honor do not call requests

As we have previously reported, a growing number of states require financial institutions and others to have procedures in place to detect, block, and ultimately report these types of alleged scams. In addition, many banking agencies, regulators, and attorneys general are expecting financial institutions and others, especially entities that regularly interact with the elderly, to have robust elder abuse prevention policies and procedures in place. While the alleged facts are extreme in this case, the risk of committing elder financial abuse exists among practically all banks and nonbanks in the consumer financial services space.

Ballard Spahr’s Consumer Financial Services Group regularly advises financial institutions and others on elder financial abuse prevention. We regularly develop and implement elder financial abuse prevention programs and advise clients on state laws regarding reporting of potential elder financial abuse. In addition, we regularly provide training to entities with respect to identifying potential elder abuse, handling suspected elder financial abuse properly, and complying with laws and best practices with respect to preventing and reporting elder financial abuse.

For more information, please contact Consumer Financial Services Group Practice Leader Alan S. Kaplinsky at 215.864.8544 or kaplinsky@ballardspahr.com, John L. Culhane, Jr., at 215.864.8535 or culhane@ballardspahr.com, or Joseph J. Schuster at 215.864.8614 or schusterj@ballardspahr.com.


Copyright © 2015 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Related Practice

Consumer Financial Services

CFPB

Visit CFPB Monitor, our blog on the Consumer Financial Protection Bureau >

Subscribe to the blog via e-mail >