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Loan Scammers Turn Around and Get Nailed Again by FTC

At the request of the Federal Trade Commission, a U.S. district court judge in Florida has issued a contempt order against Bryon Wolf and Roy Eliasson, two key individuals who operated a deceptive marketing scheme since 2009. According to the order, the defendants violated a December 2008 permanent injunction and final order that barred them from making a range of misrepresentations to consumers, billing consumers without their authorization, and failing to make required disclosures in future business endeavors. The contempt order imposes a judgment of $14.75 million against the defendants, which is the amount they illegally took from consumers in their second scheme.

“This pair of defendants showed complete contempt, both for consumers and for a court order,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “And this action shows that if you violate an FTC order, you’ll pay for that violation. We put orders in place to protect consumers, and we make sure that companies follow them.”

Today’s announcement is the latest example of how the FTC protects American consumers from defendants who are recidivists. The agency monitors every FTC order for compliance, and quickly deals with those wrongdoers who defy its orders. In the last 12 months alone, the FTC successfully tried five contempt cases. The defendants in these actions face tens of millions of dollars in judgments and are banned from various commercial activities.

Case History

In 2007, the FTC sued Suntasia Marketing, Inc., charging the operation with deceptively marketing negative-option programs to consumers nationwide. The defendants allegedly defrauded consumers and charged their bank accounts without their consent for a variety of programs, including memberships in discount buyer’s and travel clubs.

In 2008, 14 defendants agreed to an order settling the FTC’s charges, and were required to pay more than $16 million to provide refunds to defrauded consumers. Bryon Wolf and Roy Eliasson were ordered to pay over $11 million for their role in the scheme, and were barred from a variety of unlawful acts in the future, including misrepresenting material facts regarding an offer, failing to clearly disclose material terms during a sale, and debiting consumers’ accounts without their consent.

But according to the FTC’s motion for contempt, within months of the 2008 order, Wolf and Eliasson devised a new plan to defraud consumers through Membership Services, LLC, a firm they controlled. In this scheme, they used deceptive phone and internet solicitations to target recent loan applicants and misled them into believing they would provide them with cash advances, loans, or lines of credit. Instead, the defendants debited the consumers’ accounts for membership in a continuity program. Very few consumers used the program, and many cancelled when they found out the defendants had debited their accounts and planned to take additional payments from them in future months.

Based on this conduct, following a two day evidentiary hearing, the court found that the defendants had violated the terms of a court-ordered permanent injunction by engaging in some of the same kinds of deceptive tactics that led to the FTC’s prior case against them.

According to the court, while the defendants sent messages to consumers communicating they had been “approved” for a loan, none of them ever received a loan. Instead, many of their bank accounts were debited $49.95 or more a month after they provided their financial information to the defendants. – Source

Loan Scammers Turn Around and Get Nailed Again by FTC
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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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