TALLAHASSEE — The Florida Department of Agriculture and Consumer Services (FDACS) Division of Consumer Services issued administrative complaints, revoking the telemarketing registration for three Florida-based businesses conducting sham telemarketing operations. This follows a court order obtained by the Federal Trade Commission (FTC) and the Florida Attorney General.
FDACS revoked the telemarketing registrations of GDP Network, LLC, G&N Squared, LLC, and G&G Success, LLC. Since 2014, these three telemarketing businesses conducted sham credit card interest rate reduction operations that often targeted financially distressed consumers and older adults.
“As Florida’s consumer protection watchdog, we have zero tolerance for businesses attempting to defraud Floridians, especially those who may be struggling with debt and are seeking help,” said Agriculture Commissioner Nikki Fried. “Revoking these registrations is necessary to hold these bad actors accountable for their fraudulent actions, and to prevent Floridians from being taken advantage of.”
According to FTC complaints, these companies targeted vulnerable consumers with unsolicited telemarketing cold calls, which falsely promised consumers that they would substantially and permanently reduce their credit card interest rates in exchange for sizable upfront fees. The company’s telemarketers failed to identify themselves and misled consumers into believing that they were credible organizations associated with their bank, credit card company, or well-known credit card networks such as Visa and MasterCard.
These businesses charged significant upfront fees ranging from $995 to $3,995 for their alleged services immediately following the telemarketing call using remotely created payment orders with the promise of saving consumers thousands of dollars in credit card interest. However, their telemarketers frequently fail to provide the promised debt reduction results and typically fail to provide refunds to dissatisfied consumers, generating millions of dollars through this unlawful scheme.
In July, the FTC and the Florida Attorney General obtained a court order to freeze the assets and temporarily halt the operation of these Orlando-based businesses.
FDACS Division of Consumer Services is providing the following information on debt relief scams and legitimate practices:
Many reputable credit counseling organizations can help consumers manage their debt. Debt relief scammers offer fake guarantees to eliminate debt quickly and cleanly, but often only after the consumer has paid them. This request to pay upfront is prohibited under the FTC’s Telemarketing Sales Rule, and it is an early indicator that the offer is a scam. Legitimate debt relief firms can charge for their services but can only collect when they get results.
Signs that a debt relief company may not be legitimate include:
- Promises of a “new government program” to bail out personal credit card debt
- Guarantees about making unsecured debt go away
- Instructions to stop communicating with creditors without explaining the serious consequences
- Promises that they can stop all debt collection calls and lawsuits
- Guarantees that unsecured debts can be paid for pennies on the dollar
Consumers who work with a debt settlement company may have to deposit funds into a dedicated bank account. This account is administered by an independent third party responsible for transferring funds to creditors and the debt settlement company when settlements occur.
Information that debt settlement companies must disclose about the debt relief program before the consumer signs any agreements includes:
- The company must explain its fees and any conditions of service
- The company must disclose how many months or years before it will make an offer to each creditor for a settlement
- The company must tell the consumer how much money or the percentage of each outstanding debt the consumer must save before it makes an offer to each creditor for settlement
- The company must explain the negative consequences if the consumer stops making payments to creditors, including possible damage to credit report and credit score, creditors may sue or continue with the collection process, and credit card companies may charge additional fees and interest, which will increase the amount the consumer owes
- The funds deposited in a dedicated bank account for debt settlement belong to the consumer and the consumer is entitled to any interest earned
- The account administrator may charge a reasonable account maintenance fee, is not affiliated with the debt relief provider, and does not get referral fees
- The consumer may withdraw their money at any time without penalty
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