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Home > Debt Relief Industry > FTC Names Debt Settlement Companies Hit in Lead Generator Suit. Settled for 8.5 Million Dollars.

FTC Names Debt Settlement Companies Hit in Lead Generator Suit. Settled for 8.5 Million Dollars.

Today the Federal Trade Commission released a suit they filed yesterday against Media Innovations, Hermosa Group, Financial Future Network and Jonathan Greenburg in which they allege debt relief marketing improprieties.

The suit also names Debt Group and Epic Financial Management as the companies that received approximately 80% of the leads generated.

This action strikes at the heart of lead generators making sure they know the companies they sell leads to and the performance of those companies.

Defendants did not possess adequate substantiation for their representations that they (or any other company) will substantially reduce or eliminate consumers’ debts, achieve these results quickly or immediately, or eliminate the calls consumers receive from creditors and debt collectors. In fact, Defendants did not obtain adequate substantiation from the thirdparty debt settlement providers or lead generators, including Debt Group, LLC and Epic Financial Management, Inc., to which they sold their leads, as to whether the ultimate debt settlement providers who receive those leads provide the services or results that Defendants represented.

Claims Made in the Suit

  • Defendant Media Innovations, LLC (“Media Innovations”) is a Maryland limited liability company with its principal place of business at 9710 Traville Gateway Drive, No. 248, Rockville, Maryland 20850. Media Innovations also conducts or has conducted business at 10200 Daphney House Way, Rockville, Maryland 20850.
  • Defendant Hermosa Group, LLC (“Hermosa Group”) is a Maryland limited liability company with its principal place of business at 10200 Daphney House Way, Rockville, Maryland 20850.
  • Defendant Financial Future Network, LLC (“Financial Future Network”) is a Maryland limited liability company with its principal place of business at 10200 Daphney House Way, Rockville, Maryland 20850.
  • Defendant Jonathan Greenberg (“Jonathan Greenberg”) is the president and sole officer of Defendants Media Innovations, Hermosa Group, and Financial Future Network. At all times material to this Complaint, acting alone or in concert with others, he has formulated, directed, controlled, had the authority to control, or participated in the acts and practices set forth in this Complaint.
  • Defendants Media Innovations, Hermosa Group, and Financial Future Network (collectively, “Corporate Defendants”) have operated as a common enterprise while engaging in the unlawful acts and practices alleged below. Defendants have conducted the business practices described below through an interrelated network of companies that have common ownership, officers, managers, business functions, employees, and office locations, and have commingled funds. Because these Corporate Defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged below. Because Defendant Jonathan Greenberg has formulated, directed, controlled, had the authority to control, or participated in the acts and practices of the Corporate Defendants that constitute the common enterprise, he is also jointly and severally liable for the acts and practices alleged below.
  • Defendants are lead generators that target the millions of Americans who are struggling to pay their credit card debt. Defendants disseminate advertisements claiming that Defendants will obtain for their customers settlements of their debts, enabling those customers to pay thousands of dollars less than they owe. In fact, Defendants simply sell the consumer leads generated by their advertisements to other lead generators or to debt settlement companies and provide none of the promised services.
  • Since at least January 2007, Defendants have advertised debt settlement services to consumers across the country through English and Spanish radio and television advertisements using the Hermosa Group and Financial Future Network brand names. Jonathan Greenberg developed, created, reviewed, or approved the Hermosa Group and Financial Future Network advertisements. Defendants’ advertisements direct consumers to call a toll-free telephone number for assistance with their credit card debt. Consumers who call the toll-free number are immediately and automatically routed to third-party companies as leads. The third-party companies that purchase Defendants’ leads are typically debt settlement providers or other lead generators that re-sell the leads.

    Defendants do not provide debt settlement services to consumers, do not enroll consumers in debt settlement programs, and do not collect any fees from consumers. Instead, Defendants collect fees exclusively from the third-party companies that purchase their leads. The third party companies pay Defendants approximately $50 to $65 for each lead. Defendants have sold approximately 80% of the leads generated by their advertisements to an unrelated enterprise consisting of two companies, Debt Group, LLC and Epic Financial Management, Inc., that refers consumer leads to third-party debt settlement companies or law firms.

  • Defendants’ advertisements claim that Defendants provide debt settlement services to consumers. Defendants advertisements also claim that consumers who use the services promoted in Defendants’ advertisements will have their debts substantially reduced or eliminated, will obtain these results quickly or immediately, and will not receive calls from their creditors or debt collectors.
  • To induce consumers to purchase debt settlement services, Defendants have disseminated or caused to be disseminated advertisements that contain the following statements and depictions, among others:
    • With one simple call you can eliminate your debt in a fraction of the time and for less than you owe.
    • On Screen Graphic: A bar chart that shows a consumer’s debt shrinking from “thousands” to “hundreds” with the words “You Pay Less!” or “You Pay LESS with Hermosa!”
    • Settle Your Debt For Less Than You Owe!
    • Find out today how quickly and easily you can eliminate your debt.
    • Legally reduce your debt. Lower your monthly payments.
    • Call the [Financial Future Network] [Hermosa Group] to settle your accounts for less than you owe.
    • Let the [Financial Future Network] [Hermosa Group] put you back on track.
    • Let the professionals at the Financial Future Network help, and enjoy the freedom of debt-free living.
    • Eliminate Debt
    • It’s quick! It’s easy!
    • It’s simple, secure and proven.
    • Save money now!
    • Stop the harassing calls!
  • Defendants do not provide debt settlement services. In addition, at the time Defendants disseminated their advertisements, Defendants did not possess adequate substantiation for their representations that they (or any other company) will substantially reduce or eliminate consumers’ debts, achieve these results quickly or immediately, or eliminate the calls consumers receive from creditors and debt collectors. In fact, Defendants did not obtain adequate substantiation from the third party debt settlement providers or lead generators, including Debt Group, LLC and Epic Financial Management, Inc., to which they sold their leads, as to whether the ultimate debt settlement providers who receive those leads provide the services or results that Defendants represented. – Source

Defendants Settle Quickly with the FTC

The defendants in this case have already settled this action and have agreed to the following terms.

The are:

  • Permanently restrained and enjoined from:
    A. Advertising, marketing, promoting, offering for sale, or selling any debt relief service; and

    B. Assisting others engaged in advertising, marketing, promoting, offering for sale, or selling any debt relief service.

  • Defendants and their officers, agents, servants, employees, and attorneys, and those persons or entities in active concert or participation with any of them who receive actual notice of this Order by personal service, facsimile transmission, email, or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, marketing, promotion, offering for sale or sale of any financial related product or service, are hereby permanently restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or by implication, any material fact, including but not limited to:

    A. The terms or rates that are available for any loan or other extension of credit;

    B. Any person’s ability to improve or otherwise affect a consumer’s credit record, credit history, credit rating or ability to obtain credit;

    C. That any person can obtain a modification of any secured loan or mortgage or postpone or cancel the foreclosure of any property by renegotiating, settling, or in any other way altering the terms of payment or other terms of such debt; or

    D. That a consumer will receive legal representation.

The settlement agreement says the judgment is for $8,533,779 but will be suspended in part provided defendants pay the FTC $500,000 within 10 days. – Source

FTC Names Debt Settlement Companies Hit in Lead Generator Suit. Settled for 8.5 Million Dollars.
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FTC Names Debt Settlement Companies Hit in Lead Generator Suit. Settled for 8.5 Million Dollars. by

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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