Fill out this form to email this article to a friend
FTC settles suits with debt managers
Associated Press
Published March 31, 2005
WASHINGTON - The government Wednesday said it has reached settlements with three companies accused of bilking thousands of debt-ridden people out of more than $100-million using schemes that often left customers in worse financial shape.
The Federal Trade Commission settled lawsuits it brought last year against National Consumers Council, Better Budget Financial Services and Debt Management Foundation Services, which have since ceased most operations.
The settlements order the companies and their principles to pay back about $7-million to consumers and include $125-million in suspended penalties, which could be paid if defendants are found to have lied about their assets.
Though the individuals involved are allowed to continue in the consumer debt business, they would face tougher penalties if they repeat the fraud.
In the largest settlement, National Consumers Council, a California group of companies and individuals, failed to deliver on promises of free debt counseling, instead passing client information to other organizations that charged thousands of dollars for programs that rarely worked, according to the FTC.
Since the FTC sued in May and a judge appointed a receiver to take over NCC's business, about $24-million has been refunded.
[Last modified March 31, 2005, 01:27:20]
Share your thoughts on this story
|
News
Fifty years ago, they were screwed-up kids sent to the Florida School for Boys to be straightened out. But now they are screwed-up men, scarred by the whippings they endured. Read the story and see a video and portrait gallery.
Print
Email story
Comment
Email editor
