As part of its continuing crackdown on scams that target consumers in financial distress, the Federal Trade Commission settled charges against a debt relief operation that allegedly lured consumers nationwide into paying thousands of dollars in up-front fees, but in most cases failed to actually reduce their credit card debts, and in many cases left them even deeper in debt. The proposed FTC settlement orders ban the company, Debt Relief USA, Inc., from doing further business, and ban company principals James Wojcik and Valerie Leath from marketing any financial products and services. Litigation continues against the two other principals, Kelly Reilly and Alvin Bell.
According to the FTC’s complaint, Debt Relief USA and its principals made deceptive claims that consumers who enrolled in their program could eliminate 40 to 60 percent of their credit card debt and be out of debt in 24 to 48 months. The FTC complaint charges that few consumers received the promised results.
Under the proposed settlements, Debt Relief USA, Wojcik, and Leath are required to protect and properly dispose of customers’ personal information. They also are prohibited from misrepresenting relevant facts to consumers.
The proposed settlements also impose a $19.7 million judgment against Wojcik and Leath, which will be suspended because of their inability to pay. If it is determined that the financial information they gave the FTC was untruthful, the full amount of the judgment will become due.
Debt Relief USA has declared bankruptcy. Through settlement of a separate action brought against Debt Relief USA by the Attorney General of Texas, consumers have received $3.7 million in refunds from the company’s bankruptcy estate and will receive additional distributions soon. The FTC participated in the bankruptcy proceeding and worked with the Attorney General of Texas to ensure maximum benefit for consumers. Because the Texas settlement recovered available company funds and provided refunds to consumers, the Commission’s settlement with the company does not involve monetary relief. – Source

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If this does not scare the crap out of the bad actors. I think nothing will. This is some serious stuff.