Legal Library: Cases and Proceedings

In December 2018, the operators of a student loan debt relief scheme agreed to pay approximately $1.3 million to settle Federal Trade Commission allegations that they pretended to be affiliated with the U.S. Department of Education or with consumers’ loan servicers, and tricked consumers into believing that illegal upfront fees were being used to pay off their student loans. In July 2020, the FTC announced it was mailing checks totaling more than $1 million to individuals who lost money to the scheme.

In their complaint against Madera Merchant Services and B&P Enterprises, the Federal Trade Commission and the Ohio Attorney General allege that the companies generated and processed remotely created payment orders (RCPOs) or checks that allowed many unscrupulous merchants, including deceptive telemarketing schemes, to withdraw money from their victims’ bank accounts. The FTC’s Telemarketing Sales Rules (TSR) specifically prohibits the use of RCPOs in connection with telemarketing sales. The court issued temporary restraining orders against Madera Merchant Services and B&P Enterprises, halting their operations and freezing their assets. The defendants and the FTC have agreed to a stipulated Preliminary Injunction in this matter. The defendants agreed to a settlement with the FTC in 2020 that permanently banned them from payment processing.

The operators of a student loan debt relief scam have agreed to settle Federal Trade Commission charges that they bilked millions from consumers by falsely claiming to enroll consumers in loan forgiveness programs, for which they charged up to $1,000 in illegal upfront fees. The FTC alleged in its complaint that the defendants deceptively telemarketed their document preparation service by misrepresenting an affiliation with the Department of Education or consumers’ loan servicers, and that consumers who paid defendants an up-front fee were qualified for or approved to receive permanently reduced monthly payments or their student loans would be forgiven or discharged. On September 30, 2019, the FTC sent more than $5.4 million to nearly 40,000 people who lost money to the alleged scheme.

In November 2018, the Federal Trade Commission filed a complaint against recidivist Tuan Duong, among others, alleging he falsely promised to reduce students’ monthly loan payments or to eliminate or reduce their educational debts, but widely failed to deliver those services. The defendants also allegedly promoted a 96 percent success rate in reducing consumers’ student loan payments. In fact, the FTC alleged, the consumers who purchased these services often did not receive any debt relief and lost hundreds of dollars. The FTC alleged that the defendants charged consumers illegal upfront fees of $300 or more for these purported debt relief services. A federal court temporarily halted the scheme and froze its assets.

In May 2019, Duong, the ringleader of the scheme, agreed to settle the Commission’s charges that he bilked $11 million from consumers who were trying to reduce their student loan monthly payments or get loan forgiveness. Under the modified court order, Duong admits he violated the 2016 order and is now banned from the telemarketing industry. The proposed modified final order against Duong contains both injunctive and monetary relief. The order contains an $11,000,215.25 judgment as compensatory relief to the FTC and permanently bans Duong from the telemarketing industry.

In July 2019, both Avitia-Pena, president of Impetus Enterprise, Inc., and Jimmy Calderon, manager of Capital Sun Investments, LLC, settled the FTC’s charges alleging they conducted student loan debt relief operations associated with Duong. The $11 million settlement to be paid by Avitia-Pena represents gross revenues of Impetus Enterprise Inc.’s student loan debt relief operation. The order against Calderon and Capital Sun Investments contains a suspended judgment for $1.3 million, the gross revenues of Capital Sun Investments, LLC’s operation.

Four separate operations responsible for bombarding consumers nationwide with billions of unwanted and illegal robocalls pitching auto warranties, debt-relief services, home security systems, fake charities, and Google search results services have agreed to settle FTC charges that they violated the FTC Act and the agency’s Telemarketing Sales Rule (TSR), including its Do Not Call (DNC) provisions.

10 Companies and 10 individuals settled Federal Trade Commission allegations that their deceptive and unfair tactics violated the FTC Act and the Fair Debt Collection Practice Act. The action is part of the FTC's continuing crackdown on all players involved in phantom debt schemes, including those who sell fake debt portfolios and those who harass consumers to collect the phony debt. 

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.

In December 2018, the Federal Trade Commission announced that the operators of Florida-based student loan debt relief scheme Student Debt Doctor are banned from the debt relief business as part of agreements settling allegations that they collected illegal upfront fees and falsely promised to help some consumers enroll in government programs that would reduce or forgive their student loan debt. In June 2022, the agency announced that it is sending 22,817 checks totaling more than $2 million to borrowers who lost money to the scheme.

In 2018, the FTC and State of New York alleged that Campbell Capital, LLC and its owner, Robert Heidenreich, along with a number of other related companies, collected payments on debts from consumers that exceeded the amounts they allegedly owed. The defendants in the case were able to collect these funds by allegedly using tactics such as threatening that consumers would be arrested or served with legal papers at work if they did not make payments immediately. In some cases, according to the suit filed by the FTC and New York, the collectors pretended to be sheriff’s office employees or process servers when making such threats in phone calls with consumers.

Heidenreich agreed to a settlement with the FTC and New York in February 2020 that permanently banned him from the debt collection industry and required him to turn over funds to be used to provide refunds to affected consumers. In total, $19,826.64 will be sent to consumers, with each receiving a check for $32.88.

In June 2018, the operators of a Los Angeles-based student loan debt relief scam agreed to settle Federal Trade Commission charges that they falsely claimed to be affiliated with the Department of Education, charged consumers illegal upfront fees, and collected monthly fees they claimed would be credited toward consumers’ student loans. In February 2021, the FTC sent refunds totaling to people who lost money as a result of the scam.