A reader just brought this press release to my attention.
Federal Judge Rules in Favor of Financial Freedom Processing, Debt Consultants of America and Debt Professionals of America, Finding that the Federal Trade Commission Failed to Prove its Claims
DALLAS, March 21, 2012 /PRNewswire via COMTEX/ — In a stunning rebuff of the Federal Trade Commission’s (FTC) attack on the debt settlement industry, a federal court judge rejected the case against three Dallas-based companies. United States District Judge David C. Godbey of the Northern District of Texas delivered a verdict in favor of Financial Freedom Processing, Inc., Debt Consultants of America, Inc., and Debt Professionals of America, Inc.
Debt settlement companies, for a fee, negotiate discounted settlements with a consumer’s creditors after the consumer has saved enough money in a special purpose account to fund each settlement. The companies advertised that, through their programs, consumers can save 30 to 60 percent of their credit card and other unsecured debt. Upon completion of the program, usually in 36 months or less, the consumer will be debt free.
The Federal Trade Commission (FTC) complaint alleged that the companies’ savings and timing advertising claims violated the Federal Trade Commission Act and sought more than $58 million dollars in restitution. However, Judge Godbey found that the claims “were true for a majority of the customers of the Companies who completed the program.”
Bob Wise, of the Dallas law firm Lillard Wise Szygenda PLLC and the companies’ lead trial attorney, was pleased by Judge Godbey’s decision, pointing out that “the FTC failed to prove its case. To the contrary, as Judge Godbey found, the companies and their officers and directors used their best efforts to comply with the law and acted in good faith at all times.”
Corey Butcher, a founder and CEO of FFA, said, “Even though the FTC had no evidence of wrongdoing, the collateral damage from this meritless prosecution is huge: 300 employees lost their jobs, hundreds of thousands of dollars in revenue was lost, and thousands of consumers overwhelmed by debt were deprived of a viable option to bankruptcy. This is a gross example of over-reaching by a runaway government agency that has nearly derailed an entire industry.”
Butcher continued, “Debt settlement companies fill a critical need that no one else is providing. Consumers need help in learning how to manage their spending and save money. When credit card companies raise interest rates on debt to 28 or 30 percent, consumers get caught in a vortex they can’t escape. Debt settlement companies help educate consumers and give them an opportunity to avoid bankruptcy and get their lives back on track.” Butcher concluded, “There was a lot at stake, and we’re thankful that justice prevailed in this case.”
Financial Freedom Processing is the Dallas-based parent company for Financial Freedom of America, Debt Consultants of America and Debt Professionals of America. The Dallas-based companies have helped thousands of clients settle more than 30,000 accounts, and eliminated more than $150 million in unsecured debt.
SOURCE Financial Freedom Processing
Financial Freedom Processing, Debt Consultants of America and Debt Professionals of America Post Press Release on Victory by Steve Rhode
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