FTCS Campaign Against Advance Fee Loan Fraud: Internet Promoter Banned from Business for Life

A Jacksonville, Florida, man who allegedly bolstered his promises of easy credit for consumers by claiming that he had an “excellent record” with the “National Bureau of Consumer Affairs,” is out of the advance fee credit business forever, under an agreement he has signed to settle Federal Trade Commission charges against him. It turns out that the National Bureau of Consumer Affairs was one of the names under which Johnny Ray Dunn conducted his South Carolina-based fraudulent credit services business, the FTC charged. The settlement negotiated by the FTC also requires Dunn to pay $3,500 in consumer redress, bars him from violating the Telemarketing Sales Rules’ provisions against deceptive or abusive telemarketing practices, and imposes a broad ban on material misrepresentations in connection with any product or service he sells in the future.

The FTC filed charges against Dunn and four other businesses in June as part of a nationwide crackdown on telemarketers that promise loans or credit, charge advance fees ranging from $25 to several hundred dollars, but then never deliver. The Attorneys General of 15 states also participated in the crackdown, dubbed “Project Loan Shark,” bringing another eight cases. The FTC’s new Telemarketing Sales Rule makes it illegal for any telemarketer who promises consumers a loan or other credit to ask for money up front, and many of the cases brought by the FTC and the states alleged violations of this rule. In announcing the crackdown, the FTC cautioned consumers, when a telemarketer promises a loan or credit but asks you to pay in advance, to just say no. First, it’s against the law and second, legitimate lenders never guarantee a loan before you apply, especially if you have bad credit, no credit or a bankruptcy.

This and other advice is contained in a free FTC brochure for consumers titled “Easy Credit? Not So Fast.”

The FTC complaint in the Dunn case states that he advertised VISA cards and loans with “no credit check” on the Internet and in numerous publications, including Income Opportunities and the National Enquirer, and charged an advance fee of $49. What consumers actually got for their money was a list of companies offering loans (for which consumers had to qualify), along with various self-help credit-related materials. Dunn also represented that the National Bureau of Consumer Affairs was an independent consumer protection agency, when it was simply one of the names under which he did business, the FTC charged. Dunn has done business under numerous other names as well, the complaint states, including National Bureau of Credit, Inc.; Carolina Firstate Bankcard & Loan Program Services; Carolina Firstate Financial; NBC Services; and Fidelity National Financial Services.

The consent judgment to settle these charges bans Dunn forever from engaging in any way in the marketing or sale of credit services for advance fees, and prohibits him from misrepresenting that any business he controls is an independent consumer protection agency and from making any other material misrepresentation in connection with marketing any product or service. The settlement also bars violations of the FTC’s Telemarketing Sales Rule. And it requires Dunn to pay the $3,500 for redress within 15 days. The FTC attempts to use such funds to provide refunds to consumers where practical; otherwise, they are deposited in the U.S. Treasury.

Finally, the consent judgment contains various recordkeeping and recording requirements designed to assist the FTC in monitoring Dunn’s compliance.

The Commission vote to approve this consent judgment for filing in court was 5-0. It was filed in U.S. District Court for the District of South Carolina, Charleston Division, on Aug. 8 and approved by the court the same day.

NOTE: This consent judgment is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the FTC brochure and the consent judgment in this case are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202- 326-2710. FTC news releases, consumer materials and other documents also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File No. X96 0070)
(Civil Action No. 2 96 1675 18)