Defendants in Bogus Credit Card Business Settle FTC Charges

Brent Ballard, doing business as SOC Enterprises, and Jeff Russell, doing business as Jeff Russell & Associates have agreed to settle Federal Trade Commission charges over their roles as third-party telemarketers for SureCheK Systems, Inc., doing business as Consumer Credit Corporation (CCC). According to the FTC, Ballard, Russell, CCC and others, deceptively telemarketed advance fee credit cards. The defendants allegedly told consumers that they could get an unsecured Visa or MasterCard credit card, regardless of their past credit history, for an upfront "processing" fee. However, even after paying the fee, consumers did not receive the promised credit cards. As part of the settlements, Ballard is banned from participating in any enterprise that telemarkets or that assists others in telemarketing. Russell is banned from telemarketing credit cards and is required to post a $50,000 bond before engaging in telemarketing or assisting other telemarketers in the future. In addition, both are prohibited from failing to disclose any material fact relating to the cost or conditions for receiving any extension of credit.

The FTC alleged that the defendants violated provisions of the Telemarketing Sales Rule (TSR) that prohibit telemarketers, who claim they can arrange credit for consumers, from asking consumers to pay any money before they receive the loan or credit. These charges stemmed from the defendants' role as third-party telemarketers for CCC. In July 1997, the FTC and the Arkansas Attorney General filed the complaints in federal district court against SureCheK Systems, doing business as Consumer Credit Corp. and Consumer Credit Development Corp., and their principals, as part of "Peach Sweep," an enforcement initiative against advance fee credit card fraud. The complaint alleged that CCC used various telemarketers, including Ballard and Russell, to solicit business under CCC's name and offered consumers a major unsecured credit card in return for an advanced one-time processing fee. The defendants targeted consumers with credit problems, and told them that they were being offered or pre-approved for a Visa or MasterCard, with absolutely no security deposit, and regardless of their past credit history. The defendants persuaded consumers to give their checking account information, and in some instances, debited their checking accounts without the consumer's authorization. After paying the fee, many consumers received only application forms allowing them to apply for credit cards, with additional fees, through banks that issue cards based on the bank's own credit criteria.

The settlements with Ballard and Russell, which are subject to court approval, prohibit them from making any false or misleading statements about, or failing to disclose material facts relating to the cost or conditions of receiving any extension of credit. The settlements bar them from making misleading statements about or failing to disclose material facts about any product or service they sell. Specifically, the settlements prohibit them from misrepresenting that:

• they will provide or arrange for consumers to receive credit cards;
• consumers' applications for credit cards have been approved; or
• consumers will receive credit cards regardless of their creditworthiness.

In addition, the settlement prohibits Ballard from supplying information about the people he scammed -- such as the name, address, telephone number, credit card or bank account number -- to anyone other than law enforcement authorities.

Finally, the settlements contain other recordkeeping provisions designed to assist the FTC in monitoring compliance.

The Commission votes to authorize the filing of the stipulated final judgments were 4-0. The Ballard settlement was filed in the U.S. District Court, Northern District of Georgia, Atlanta Division. The Russell settlement was filed in the U.S. District Court, Middle District of Florida, Tampa Division. The FTC's Atlanta Regional Office handled the investigations.

NOTE: A stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Judgments have the force of law when signed by the judge.

Copies of the settlement are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD 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 File No. 972 3291- Bennett
(FTC File NO. 972-3290 - Russell)
(Civil Action No. 1:98-CV-1401-JTC - Bennett)
(Civil Action No. 98-1640-CIV-T-26B - Russell)