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A Houston-based defendant that defrauded thousands of consumers nationwide through an advance-fee loan scheme has settled charges brought by the Federal Trade Commission. The FTC announced today a stipulated final court order settling the case against Antoine Peissel, doing business as The Woodway Group (Woodway), who told consumers they were guaranteed to receive a cash loan or line of credit - but only after paying an up-front $79 fee. According to the Commission's complaint, filed as part of the "Dialing for Deception" law enforcement sweep, Antoine J. Peissel misrepresented that consumers would receive their loan or credit within a week of completing an application. Instead, he left them with nothing more than complaints and a significantly lighter wallet.

"In yet another case, the FTC has exposed an operation that preyed on those most vulnerable and in need of financial help," said Bureau of Consumer Protection Director J. Howard Beales III. "Consumers, no matter what their financial condition, should be wary of such advance-fee schemes. They are illegal and usually result in people losing their money without ever seeing a dime of the promised loan or credit."

As lone principal of The Woodway Group, Peissel allegedly placed items in the Thrifty Nickel and other local "want ad" publications, prompting consumers from more than 20 states to call his toll-free number to obtain a cash loan. Typically, when a consumer called the number, Peissel or one of his representatives asked for information about their personal financial situation, as well as how much money they wanted to borrow. The caller was then placed on hold, while the company said they were conducting an "instant credit check." The representative then told the consumer that he or she had been "approved for the loan," but had to pay a $79 "processing fee" and complete a loan application. The consumer was told that once the fee was paid and the paperwork completed, he or she could expect to receive the loan in a few days.

In many cases, believing that they had been "approved" for a loan, consumers allowed Woodway to debit the $79 fee from their checking accounts. After the fee was paid, Woodway either faxed or mailed the consumer a package of materials, including the loan application, requesting that they complete it, return it, and wait at least a week for a response. This response, according to the FTC, never came, with consumers often waiting weeks for their loans before calling Woodway to complain. The FTC alleges that none of the consumers who paid a fee ever got their promised loan.

According to the FTC's complaint, Peissel, in his capacity as Woodway, engaged in deceptive practices that violated Section 5 of the FTC Act and the Telemarketing Sales Rule (TSR). Specifically, the Commission charged Peissel with: 1) misrepresenting that by paying a fee to the defendant, consumers were highly likely to receive a loan or other extension of credit (in violation of the FTC Act and the TSR); and 2) violating the TSR by requesting and receiving a fee before obtaining or arranging for the consumers to secure the loan or credit extension, while representing a high likelihood of success to consumers regarding his ability to secure such a loan or credit extension.

Under the terms of the stipulated final order, Peissel will be subject to injunctive relief, a bond requirement before engaging in future related business activities, and a suspended monetary judgment. First, he is prohibited from making misrepresentations in connection with the advertising, promotion, offering for sale, or sale of services related to loans, credit cards or other extensions of credit. Specifically, he is barred from untruthfully representing: 1) that consumers who are required to pay an advance fee can reasonably expect to receive a loan, credit card, or other extension of credit; 2) that Peissel has connections with any sources that are likely to result in a consumer getting a credit card, loan, or other extension of credit; and 3) any other fact material to a consumer's decision to buy services related to loans, credit cards, or any other extension of credit. He also is barred from any misrepresentations that would violate the Commission's TSR.

Next, the order requires Peissel to post a $175,000 performance bond before engaging in, or helping anyone else who is engaged in, the telemarketing of credit-related goods or services. This amount approximates the amount of consumer damage The Woodway Group and Peissel allegedly caused through their misrepresentations to consumers.

Third, the order provides for a $175,000 penalty, which has been suspended due to Peissel's inability to pay. However, if the court finds that Peissel misrepresented his financial condition, this amount will be immediately due. Finally, the order contains standard monitoring and scofflaw provisions, including record-keeping requirements, to ensure Peissel's compliance with its terms.

The Commission vote authorizing staff to file the stipulated final judgment was 5-0. The stipulated final judgment was filed in the United States District Court for the Southern District of Texas, Houston Division on December 6, 2002 and is subject to court approval. The Commission would like to thank the Houston, Texas Better Business Bureau for its assistance in this matter.

NOTE: Stipulated final judgments are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Stipulated judgments have the force of law when signed by the judge.

Copies of the documents mentioned in this release 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. 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, 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, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

Contact Information

Media Contact:
Mitchell J. Katz,
Office of Public Affairs
202-326-2161
Staff Contact:
W. David Griggs,
FTC Southwest Region, Dallas, Texas
214-979-9378