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FTC’s Busy Week as the Scams Keep on Comin’

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The Federal Trade Commission (FTC) nails a fake debt collection operation, sending refunds for a timeshare scam, and settled with a massive landline cramming operation. 

The FTC has charged a North Carolina debt collection operation and its owner with taking money from consumers for fake debts they did not owe. The action is part of the FTC’s crackdown on “phantom” debt collection.

According to the FTC, Anthony Swatsworth, ACDI Group and Solutions to Portfolios (ACDI) bought phony payday loan debts – loans supposedly made by “500FastCash” – from SQ Capital through a debt broker, and continued to collect on those debts even after learning the debts were fake and receiving a full refund for their purchase.

Almost immediately after ACDI started collecting on the loans, consumers complained and provided evidence that they had never taken out a 500FastCash loan. Other consumers complained that they did not have an outstanding balance. When the defendants reported the complaints to the broker, the broker returned the defendants’ money and told the defendants to stop collecting on the phony debts. Yet the defendants kept collecting from consumers for at least seven more months.

According to the FTC, since the debts SQ Capital sold were counterfeit, ACDI had no right to collect on them. The defendants are charged with violating the FTC Act and the Fair Debt Collection Practices Act.

Meanwhile, the FTC is mailing 338 checks totaling more than $319,000 to people who lost money to Information Management Forum, which also did business as Vacation Property Marketing, and its owner, Edward Lee Windsor.

The defendants lured consumers into paying “registration fees” for their services by making unsolicited telemarketing calls to timeshare owners and falsely claiming to have renters or buyers lined up for the timeshare property. In 2013, they were banned from selling timeshare resale services, and from telemarketing.

Check recipients will receive full refunds based on information they reported to law enforcement. The average amount is $945.

Recipients should deposit or cash checks within 60 days. If they have questions about the case, they should contact the FTC’s refund administrator, Analytics, at 855-907-3187.

Finally, the remaining defendants behind a massive landline cramming operation agreed to settle Federal Trade Commission charges that they placed more than $70 million in unauthorized charges on consumers’ phone bills.

The settlements with defendants Steven Sann, Terry Lane, and the corporate defendants who operated the scheme, resolve the remaining charges the FTC brought against American eVoice, Ltd., eight other companies, and four individual defendants.

In its complaint, the FTC alleged that the operation placed charges ranging from $9.95 to $24.95 per month on consumers’ landline phone bills for voicemail services they never signed up for and never even knew they had.

The lead defendant, Sann, his wife Lane, and the corporate defendants have now agreed to settle the FTC’s charges. Robert Braach, an accountant who provided financial and management services for the scheme, settled similar charges in November 2016.

Under the terms of the settlements, the defendants are permanently banned from all telephone billing, landline or mobile. The orders also ban all defendants from unauthorized billing in general.

The settlements with Sann, Lane, and the corporate defendants impose judgments of $41.9 million that are either partially or entirely suspended based on an inability to pay.  Under the terms of the settlements, Sann will have to forfeit more than $500,000 in ill-gotten funds that he used to fund his IRAs, and he will also surrender an Infiniti Q56 and a Nissan 350Z.  Most of Sann’s other assets have already been transferred to the Chapter 7 Trustee administering his bankruptcy estate.

In a parallel criminal case brought by the United States Attorney for the District of Montana, Sann pleaded guilty to criminal charges of money laundering and wire fraud and was sentenced to two years in prison.

The settlement with Braach imposes a judgment of $71 million that was suspended after Braach transferred $75,000 to the Commission.  In the future, if any of the defendants are found to have misrepresented their financial condition, the entire amount of the respective judgment will become due as to those defendants.

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