Business That Broke Refund Promises Will Stay Busted

A company that once claimed it could lower people’s income taxes has agreed not to engage in any future business under a proposed settlement with the Federal Trade Commission.

National Audit Defense Network Inc. (NADN), charged in an FTC complaint with failing to honor its refund promises in violation of Section 5 of the FTC Act and failing to provide refunds in the time required by the Truth in Lending Act, went out of business and filed for Chapter 7 bankruptcy in 2004, after filing for Chapter 11 reorganization in 2003. Under the proposed settlement, NADN’s bankruptcy trustee agrees not to seek court authorization to operate the business, and will notify the FTC before selling any NADN customer database, to enable the FTC to object to such a sale.

In 2005, the court granted summary judgment against NADN’s president, Weston J. Coolidge. Litigation against other individuals involved in NADN continues.

The Commission voted 5-0 to authorize staff to file the stipulated final judgment and order for permanent injunction and other equitable relief in U.S. District Court for the District of Nevada, which occurred on August 25, 2006.

Note: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

Copies of the complaint and stipulated final judgment are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X02-0016)