The Federal Trade Commission has secured a court order halting the operations of a debt relief enterprise that allegedly scammed consumers, primarily older Americans and veterans, out of more than $100 million through impersonation and deception. The scheme, run by a network of seven companies and three individuals operating under names like Accelerated Debt Settlement, is accused of impersonating banks, government agencies, and credit bureaus to convince consumers to pay thousands in illegal advance fees for debt relief services that were ineffective or never delivered.
The defendants posed as consumers’ credit card companies and government entities like the Social Security Administration and the Consumer Financial Protection Bureau, according to the FTC’s complaint. They contacted consumers, using databases like the Do Not Call Registry, falsely claiming their credit cards had been compromised. After alarming consumers, defendants would transfer the call to a second agent posing as a federal official or credit bureau representative, who then pitched the debt relief services.
Consumers were told they could have their debts reduced by as much as 75% or eliminated completely. They were directed to stop making payments on their credit cards, which resulted in increased debts and credit score damage. In one case, a veteran saw his credit score drop from the high 700s to the 500s and he nearly lost his security clearance. Another veteran was forced to tap into retirement savings after paying nearly $10,000 in unlawful fees.
The lawsuit, filed in the District Court for the District of Arizona, alleges violations of the FTC Act, the Telemarketing Sales Rule, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, and the FTC’s Impersonation Rule. The court granted a temporary restraining order that:
- Freezes the defendants’ assets
- Appoints a receiver to oversee the business
- Prohibits the release or use of customer data
- Authorizes immediate access to business premises
- Requires repatriation of foreign assets
The order also prohibits defendants from misrepresenting their affiliations, charging upfront fees for debt relief, failing to disclose credit risks, using remotely created checks, or obtaining credit reports without a permissible purpose.
The corporate defendants include Accelerated Debt Settlement Inc., ADS Resolve LLC, Financial Solutions Group LLC, Unified Capital Services LLC, Mediawerks, Resolution Specialists LLC, and Futura Capital LLC. Individual defendants named are Jeffrey A. Lakes, Robert Knechtel, and Elizabeth Reaney
Read the complaint. Read the order
