Consumer Payment Card News

FTC Rounds-Up Bad Dudes in July

Last month the Federal Trade Commission (FTC) nailed a telemarketing scam, two phony debt scams, and extracted (and sending) consumers refunds from a fake property rental scam, phony debt collector and a deceptive ride-hailing service.

Consumers lost at least $3 million in a telemarketing scheme from consumers who sought help with paying personal expenses, such as credit card debts, medical bills, and home repairs. 

The Federal Trade Commission (FTC) says the fraudsters falsely told consumers they could get $10,000 or more in government or private grant money by using the defendants’ service. They charged up-front fees ranging from $295 to $4,995, and routinely told consumers that, for an additional fee, they could either obtain more grant money or receive the money faster.

According to the FTC, most, if not all, consumers received nothing from the defendants and ended up deeper in debt. The defendants operated under many names, often changing names when they received consumer complaints or cease and desist notices from state attorneys general, or when they lost merchant accounts, which are used to process charges to consumers’ credit and debit card accounts.

New York-based Hylan Asset Management and Worldwide Processing Group have been charged by the FTC and the New York Attorney General’s Office for running a scheme to collect money from consumers on fake and unauthorized debts.

The FTC says HYLAN bought, placed for collection, and sold lists of phantom debts, including debts that were fabricated by the defendants or disputed by consumers. Hylan placed these phony debts for collection with several collection agencies, including Worldwide Processing Group, who collected on the fake debts and used illegal tactics to do so.

The FTC says Hylan was aware the debt was fabricated. Despite this knowledge, Hylan continued to buy phantom debt lists and place them for collection, even after learning that consumers disputed the debts. Similarly, Worldwide Processing continued its collection efforts after consumers said they had never heard of the lenders and provided records to prove they owed nothing. Worldwide Processing engaged in other illegal collection practices, including failing to provide required notices about the debt and consumers’ rights to dispute the debt, and threatening to contact, or contacting, family members or other third parties.

The FTC shutdown Hite Media Group, doing business as Premium Grants; Premium Business Solutions doing business as Premium Services, Premium Grants; 2 Unique, doing business as Premium Services, Unique Grants, and Grant Support; and Amazing App.

Credit Bureau Center and MyScore has agreed cough up more than $5 million to consumers after deceiving people with fake property ads and deceptive promises of “free” credit reports, and then tricked them into enrolling into a costly monthly credit monitoring service.

The FTC says the companies placed Craigslist ads for rental properties that did not exist or that they had no right to offer for rent. They impersonated property owners and offered property tours if consumers would first obtain credit reports and scores from their websites. These sites claimed to provide “free” credit reports and scores, but then enrolled consumers in a credit monitoring service with monthly charges of $29.94. Many people did not realize they were enrolled until they noticed unexpected charges on their bank or credit card statements, sometimes after several billing cycles.

The FTC is mailing 597 checks totaling more than $184,000 to people who were allegedly tricked into paying phony debts. Delaware Solutions with collected on debts they knew were bogus, they also ignored evidence the debts were invalid, failed to identify themselves as debt collectors, falsely portrayed themselves as process servers or attorneys, and falsely threatened arrest or litigation for failure to pay.

The average refund amount is $308.37.

Uber drivers will divide up $20 million following a settlement with the FTC. The ride-hailing company exaggerated the yearly and hourly income drivers could make in certain cities, and misled prospective drivers about the terms of its vehicle financing options. Uber falsely claimed on its website that uberX drivers’ annual median income was more than $90,000 in New York and over $74,000 in San Francisco. In fact, drivers’ annual median income in those cities was actually much lower and very few drivers—less than 10%—earned the yearly income Uber touted.

The FTC is now sending 88,799 checks to affected Uber drivers. The average refund amount is $222.96.

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