FTC Settlement in Advance-Fee Loan Scheme Includes $10,000 for Redress, $250,000 Bond Requirement

Patricia Esme Popp has agreed to pay $10,000 to settle Federal Trade Commission charges that she enticed consumers to call her nationally-advertised 800 number with promises of "guaranteed" loans. In fact, all she did was refer consumers to other firms to which they could apply for loans, the FTC alleged. The settlement resolves charges the FTC filed in June against Popp, who does business as Glendale Associates, Crown Credit Services, and Star Financial Services. In its complaint, the FTC also had alleged that Popp charged consumers $25 for her "services," a violation of the Telemarketing Sales Rule’s ban on advance-fee loans. In addition to a $400,000 judgment, of which all but $10,000 is waived unless Popp is found to have misrepresented her financial condition, the FTC settlement would prohibit Popp from violating the Rule and from misrepresenting any credit offer or service in the future. The settlement also would protect her future customers by requiring her to post a $250,000 bond before engaging in any telemarketing effort and before offering any credit services.

Popp does business out of Plano and Frisco, Texas.

The case against Popp was filed as part of a federal-state crackdown on U.S. and Canadian advance-fee loan boiler rooms, which resulted in eight cases filed by the states and five by the FTC. Under the Telemarketing Sales Rule, a telemarketer who guarantees consumers a loan or other form of credit, or who states that there is a strong chance he or she can arrange such credit for a consumer, is prohibited from asking consumers to pay any money before they receive the loan or credit offer.

The $10,000 will be used for redress to consumers, if practicable. The settlement also prohibits Popp from selling or transferring her old customer lists, and contains various record keeping and reporting provisions designed to assist the FTC in monitoring Popp’s compliance.

The Commission vote to file the settlement was 5-0. It was filed this morning in U.S. District Court for the Eastern District of Texas, Sherman Division. It requires the judge’s approval to become binding.

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 consent judgment and a free FTC brochure titled "Easy Credit? Not So Fast" 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, related documents and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

or

Susan E. Arthur
Dallas Regional Office
100 N. Central Expressway, Suite 1860
Dallas, Texas 75201
214-767-5517

(FTC File No. X960084)
(Civil Action No. 4:96CV183)

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