Feds Shut Down Debt Relief Companies That Only Relieved Customers Of Their Cash

We occasionally have the TV turned on in the background here at the Consumerist Batcave, so we know that anyone in the market for a sketchy debt-relief firm has many, many options to avoid calling. But now there are a few fewer questionable companies littering the daytime airwaves because the Federal Trade Commission has halted the operations of four services that allegedly made false claims about being lawyers, debited money from people who did not actually order the services — oh, and failed to get any significant debt relief for the customers that actually signed up.

The companies — Nelson Gamble & Associates LLP, Jackson Hunter Morris & Knight LLC, BlackRock Professional Corporation, and Mekhia Capital LLC — are all owned by the same man and all marketed and sold debt relief services promising that qualified attorneys would settle consumers’ debts for substantially less than they owed.

One company boasted of settling more than $90 million of debt in a single year and claimed its “proven tactical methods” would decrease customers’ debt “by 50% to 80% of your total outstanding balances… Typically, you can be free from debt in three years or less.”

But the FTC complaint says that few, if any, debts were ever settled by the defendants.

The companies and the man who owns them have been charged with violating the FTC Act and the agency’s Telemarketing Sales Rule by making false and deceptive claims and by causing consumers’ bank accounts to be debited without their express, informed consent.

From the FTC:

They also allegedly violated the TSR by charging advance fees for debt relief services, calling phone numbers listed on the National Do Not Call Registry, calling consumers who had told them not to call, failing to transmit caller identification to consumers’ caller ID service, delivering prerecorded messages without consumers’ prior written consent, repeatedly calling consumers to annoy them, and delivering prerecorded messages that failed to identify the seller, the call’s purpose, and the product or service. In addition, the defendants allegedly violated the Electronic Fund Transfer Act and Regulation E by debiting consumers’ bank accounts on a recurring basis without their written authorization, and without providing consumers with a copy of the authorization.

“Giving people false hope by promising to reduce their debt is bad enough,” said FTC Chairman Jon Leibowitz. “But stealing their money by debiting their bank accounts without their permission is beyond the pale.”

Comments

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  1. Abradax says:

    Beyond the pale is the new outraged.

    Overused, and getting annoying.

  2. crispyduck13 says:

    It’s about time. I hate those commercials like poison, just a bunch of vultures.

    • Loias supports harsher punishments against corporations says:

      Especially when free debt counseling is available in, I believe, every state.

  3. benminer says:

    If people did their homework and didn’t believe things that were good to be true they would avoid being scammed almost all the time. If you need this type of service then deal with a reputable non profit. nfcc.org is a good place to start.

  4. scoosdad says:

    I wish that Rachel worked for them on the side.

  5. oldwiz65 says:

    The crook will simply start a new business under a new name; he’s probably already hidden the money in offshore accounts just like all of the other crooks.

  6. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    OOO and they also called numbers on the Do Not Call listing! You don’t say.

    I hate people who prey on other people. Period. Hopefully the people in charge of this scam will spend time in Federal prison, and I don’t mean Lewisburg.

  7. JaundiceJames says:

    Why don’t these people go to jail?