Legal Library: Cases and Proceedings

In June 2024, the Federal Trade Commission announced that it took action to stop Prosperity Benefit Services, a student loan debt relief scheme that the agency says bilked more than $20.3 million from consumers seeking debt relief by pretending to be affiliated with the Department of Education. The FTC also charged that the company and its operators falsely claimed that they would take over consumers’ student loans to get them loan forgiveness that did not exist. A federal court temporarily halted the scheme and froze its assets at the request of the FTC, which seeks to end the defendants’ deceptive practices. 

The Federal Trade Commission has stopped Mission Hills Federal, a student loan debt relief scheme, alleging it bilked more than $23 million from thousands of consumers with false claims that it would service and pay down their student loans. After the FTC filed a complaint seeking to end the deceptive practices, a federal court temporarily halted the scheme and froze its assets. The FTC filed an amended complaint on August 27, 2019, adding Labiba Velazquez as an alleged defendant. On July 20, 2020, the court granted final summary judgment.

In June 2021, the defendants appealed the District Court’s granting of summary judgment. In June 2022, the Ninth Circuit Court of Appeals issued its decision, rejecting the defendants’ arguments and affirmed the District Court’s grant of summary judgment, ruling in favor of the FTC. In March 2024, the FTC sent more than $4.1 million in refunds to consumers harmed by the defendants. 

The Federal Trade Commission and the California Department of Financial Protection and Innovation (DFPI) are taking action against various companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, and the owners of the companies, Dominic Ahiga and Roger Scott Dyer, for operating a sham mortgage relief operation that misled consumers and cost them millions. In the first case brought jointly by the two agencies, the FTC and DFPI allege that the companies charged consumers thousands of dollars with false promises they would negotiate with consumers’ mortgage lenders to alter their loans, at times even representing they were affiliated with government COVID-19 relief programs. A federal court has temporarily shut down the operation and frozen the assets of the defendants in the case.

The court’s orders bar the individuals and their companies from directly or indirectly engaging in telemarketing, debt relief services, and making any misrepresentations or unsubstantiated claims about any product or service.

The Federal Trade Commission is sending more than $222,000 in refunds to consumers harmed by a deceptive mortgage relief operation known as Lanier Law. The scheme collected thousands of dollars in upfront fees from homeowners by promising to lower their monthly payments but then failed to deliver.

The U.S. District Court for the District of Nevada has ruled in favor of the Federal Trade Commission in a case against the operators of a scheme that deceived financially distressed homeowners by falsely promising to make their mortgages more affordable.  The defendants also charged consumers illegal advance fees and unlawfully told consumers not to pay their mortgages to or communicate with their lenders.

In January 2024, The FTC sent more than $1.2 million in refunds to consumers who lost money to Consumer Defense.

In February 2018, the Federal Trade Commission charged student loan debt relief scammer Brandon Frere and his companies, including Ameritech Financial, with bilking millions of dollars from thousands of consumers by falsely promising that consumers’ monthly payments would go towards paying off their student loans. In October 2020, Frere and his companies settled FTC’s charges. In August 2023, the FTC and the Department of Justice sent more than $9 million in refunds to consumers who lost money.

As a result of a Federal Trade Commission lawsuit, the operators of an alleged credit card debt relief scheme based in Tennessee have agreed to court orders that would permanently ban them from telemarketing and selling debt relief products or services.

Sean Austin, John Steven Huffman, John Preston Thompson, and their affiliated companies were charged by the FTC in November 2022 with taking tens of millions of dollars from people by falsely promising to eliminate or substantially reduce their credit card debt. At the time, a federal court agreed to the FTC’s request to temporarily freeze the defendants’ assets and appoint a receiver over the businesses while the case took place.

The U.S. District Court for the Middle District of Tennessee, Nashville Division, entered the final orders on April 28, 2023.

According to a 2016 complaint brought jointly with the Florida Attorney General’s Office, the Life Management defendants bombarded consumers with illegal robocalls in attempts to sell them bogus credit card interest rate reduction services. According to the complaint, the defendants guaranteed that they could substantially and permanently lower consumers’ credit card interest rates and save them thousands of dollars in interest payments. Consumers allegedly made up-front payments but rarely, if ever, got the promised services. In December 2018, a federal judge in Florida permanently banned Kevin W. Guice from the telemarketing and debt-relief industries, agreeing with the FTC and State that he founded and operated the  scam that took in over $23 million from more than 10,000 consumers, until halted by a June 2016. In July 2023, the FTC returned more than $540,000 to defrauded consumers.

In November 2019, the Federal Trade Commission obtained a temporary restraining order halting an operation that bilked consumers out of millions of dollars by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief. In September 2020, the FTC announced several of the operators settled FTC charges and agreed to pay at least $835,000. In January 2022, the FTC announced that the remaining defendants in the case are banned from providing student loan debt relief services in settlements with the FTC. The defendants are required to forfeit all of their frozen funds held by the receiver. In June 2023, the FTC sent more than $3.3 million to consumers harmed by this scam.

At the request of the Federal Trade Commission and the Florida Attorney General's Office, a federal court temporarily halted an alleged sham credit card interest rate reduction operation that often targeted financially distressed consumers and older adults in July 2020. In February 2022, the FTC announced that the operators are permanently banned from the debt relief industry as part of court orders resolving charges by the FTC and Florida AG’s Office.

In September 2019, the FTC announced a complaint against the operators of two student loan debt relief schemes, and a financing company that assisted them, with bilking millions of dollars from consumers. The FTC alleged Manhattan Beach Ventures and Equitable Acceptance Corporation and Student Advocates Team, and the financing company that assisted them illegally charged upfront fees that the companies led consumers to believe went towards their student loans, and falsely promised that their services would permanently lower or even eliminate their loan payments or balances. On August 18, 2022, the FTC it was sending more than $822,000 back to defrauded consumers.

The operators of a scheme that conned consumers into paying non-existent debts will be permanently banned from the debt collection business and from misleading consumers about debt in a settlement with the Federal Trade Commission.

The Federal Trade Commission is sending payments totaling more than $1 million to 1,966 consumers who were harmed by a debt collection scheme that conned consumers into paying debts they did not owe. The defendants used several names including GAFS Group, Global Mediation Group, and Mediation Services.

The Federal Trade Commission, working jointly with the U.S. Department of Justice, is mailing 1,179,803 refund checks totaling more than $505 million to people who were deceived by a massive payday lending scheme operated by AMG Services, Inc. and Scott A. Tucker.

The Federal Trade Commission obtained an order permanently banning a payment processor that facilitated a fraudulent student loan debt relief scheme from processing debt relief payments. The order also requires the company and its owner to surrender $500,000 to the FTC for consumer redress.

The FTC’s complaint against Automatic Funds Transfer Services, Inc. (AFTS) and its owner, Eric Johnson, alleges that AFTS processed at least $31 million in consumer payments for a fraudulent student loan debt relief scheme sued by the FTC in 2019. The debt relief scheme used numerous names, including The Student Loan Group (SLG).

Globex Telecom, Inc. and an affiliated company will pay a total of $1.9 million to settle Federal Trade Commission and State of Ohio charges that they facilitated a scheme that peddled bogus credit card interest rate relief, illegally charging consumers millions of dollars. The settlement marks the end of the FTC’s first consumer protection case against a Voice over Internet Protocol (VoIP) service provider.

The FTC and Ohio alleged that Globex provided a company called Educare Centre Services with the means to make calls to U.S. consumers, including illegal robocalls, to market Educare’s phony credit card interest rate reduction services.

The FTC and Ohio charged that both Globex and Educare were controlled by Mohammed Souheil, Globex’s former CEO and president, who was named in the lawsuit along with a number of other corporations and individuals.

SLAC (also doing business as Aspyre), Navloan, Student Loan Assistance Center, and Adam Owens -- three California-based student loan debt relief companies and their owner -- have agreed to be permanently banned from the debt relief business in order to settle Federal Trade Commission charges that they falsely promised to lower or eliminate consumers’ student loans for an illegal upfront fee. The FTC also alleged that the companies and Owens failed to disclose that they paid consumers for positive Better Business Bureau (BBB) reviews.

In September 2016, the FTC announced a court order banning the operators of an alleged mortgage relief scam that preyed upon distressed homeowners from the debt relief business. The final orders banned the defendants from selling secured or unsecured debt relief products or services, and prohibited them from misrepresenting any financial or other products or services. The orders imposed a judgment of more than $1.7 million. The FTC’s July 2014 complaint alleged the defendants claimed they could lower consumers’ mortgage payments and interest rates or prevent foreclosure, pretended to be affiliated with a government agency or consumers’ lenders or servicers, and illegally charged advance fees for these services. The FTC announced additional settlements in the case through March 2020.

In May 2021, the FTC sent payments totaling more than $147,000 in full refunds to people affected by the student loan debt relief scam.   

The Federal Trade Commission charged the operators of two similar student loan debt relief schemes, Manhattan Beach Ventures and Student Advocates Team, and a financing company that assisted them, Equitable Acceptance Corporation, with bilking millions of dollars from consumers.

In May 2021, the FTC sent payments totaling more than $273,500 to consumers who lost money to the student loan debt relief scheme.