Debt Relief Lead Generator Ryan Golembiewski Settles With FTC for Big Bucks

The Federal Trade Commission has taken action against a debt relief lead generator, who we’ve written about before, that appears to have made false statements about the effectiveness and efficacy of debt settlement, bankruptcy and credit counseling. As you will read, the statements made to induce consumers into debt settlement and credit counseling (debt management plans) is not accurate or truthful and allegedly mislead consumers into giving up personal information for the benefit of the lead generator.

This case is yet one more reason why consumers should exercise caution when selecting any debt relief company, be it for-profit or non-profit. To help consumers find a more appropriate company for them we have published 10 Must Do Steps to Find the Best Credit Counseling or Debt Settlement Company for You.

In addition we also make available the following information:

• The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line
• How to Check Out a Business or Company to Avoid Getting Scammed or Ripped Off

This case should serve as a warning to both debt relief providers, to know specifically what your lead vendors are saying, and to consumers, to understand that many advertising claims made are simply not true.

The FTC charged the Ohio-based company and its owner with fraudulently claiming on 17 websites they operated that consumers could quickly get out of debt by working with one of several debt settlement or debt management companies. The company owner, Ryan Golembiewski, has agreed to a settlement barring the deceptive claims, and to a judgment requiring him to pay more than $390,000.

Golembiewski and a company he controlled, United Debt Associates, were “lead generators” paid by debt settlement companies to refer consumers who responded to the deceptive ads, according to the complaint. Using websites such as legitimatedebtsettlement.com, debtreliefemergency.com, freecreditcounselinghelp.com, creditdebtsettlements.com, creditcarddebtnegotiations.com, disputeddebts.com, freedebtreductionhelp.com, freedebtsettlementadvice.com, creditcarddebtfighters.com, carddebtmanagement.com, ChooseDebtRelief,com, DebtDecreaser.com, DebtFinanceCompany.com, DefeatDebts.com, FreeDebtConsolidationAdvice.org, GetInstantCashLoans.com, and LegitimateDebtHelp.com, and earning approximately $24.60 per lead generated, the defendants directed consumers to either provide their contact information online, or call a toll-free number for help with their credit card debt. Consumers who called either were routed directly to the debt settlement companies or were asked to provide preliminary information to the defendants, the complaint stated.

According to the complaint, the deceptive claims the defendants used to entice consumers to contact them included:

• “Once creditors agree to make a deal, you can get out of debt from 12 to 36 months.”
• “The U.S. government decided to introduce a stimulus package to boost the financial institutions and prevent them from breaking down. Part of this stimulus money is being utilized by the [c]redit card companies to offer debt settlements to the users.”
• Debt settlement companies “can take all of your outstanding debt and not only eliminate at least 50% of it but also provide a realistic repayment plan for the rest of your debt.”
• “If you play your cards right, your debt problems will vanish before the first year ends.”

Purported consumer testimonials on the defendants’ websites, which conveyed the impression that consumers could successfully and quickly reduce or eliminate their debts by using the supposed debt settlement services the defendants advertised, were not genuine, the FTC alleged. The defendants did not have support for the claims they made that the debt settlement companies would substantially reduce or eliminate consumers’ debts, according to the complaint. Instead, they merely posted claims provided by the debt settlement companies, or copied information from other debt relief websites.

In addition to the judgment of more than $390,000, the settlement bans the defendants from engaging in or assisting others to engage in any debt relief service, and bars them from making any misrepresentations when marketing a financial product, or any good or service. The settlement requires substantiation for any benefit, performance, or efficacy claim for financial products, and it prohibits disclosure of customer information and requires the defendants to destroy all such information they have within 30 days after the settlement order is approved by a judge.

The Complaint

The complaint filed by the FTC on September 27, 2012 stated:

Defendants run a leade ngeration business, which targets the millions of Americans who are struggling to pay their credit card debt with advertisements claiming that debt settlement providers will obtain settlements of their debts and enable them to pay thousands of dollars less than they currently owe.

Since at least February 2010, defendant Golembiewski, and since October 2010, defendant United Debt Associates, have advertised debt settlement services to consumers across the country through online advertisements using the URLs legitimatedebtsettlement.com, debtreliefemergency.com, freecreditcounselinghelp.com, creditdebtsettlements.com, creditcarddebtnegotiations.com, disputeddebts.com, freedebtreductionhelp.com, freedebtsettlementadvice.com, creditcarddebtfighters.com, carddebtmanagement.com, ChooseDebtRelief,com, DebtDecreaser.com, DebtFinanceCompany.com, DefeatDebts.com, FreeDebtConsolidationAdvice.org, GetInstantCashLoans.com, and LegitimateDebtHelp.com, amongst others.

Defendants’ advertisements direct consumers to call a toll-free telephone number for assistance with their credit card debt. In nearly all instances, the calls were routed directly to telemarketers for third-party debt settlement providers. In a handful of instances, the toll-free numbers were routed to Defendants’ telephone sales representative who would take preliminary information for debt settlement providers or enroll consumers. Consumers were also able to submit their contact information through an online form on Defendants’ websites, and third-party companies purchased these leads from Defendants.

Defendants do not provide debt settlement services to consumers and do not collect any fees from consumers. Instead, Defendants collect fees exclusively from the third­ party companies that purchase their leads. Defendants are paid approximately $24.60 for each lead generated.

In a debt settlement program, the debt settlement provider typically purports to negotiate settlements with creditors to settle consumers’ debts for less than they owe. Consumers who enroll in debt settlement programs typically stop making any payments to their creditors, often at the direction of the provider, and instead make monthly payments to the provider. Consumers have often paid the provider’s fees in advance of receiving any debt settlement services and frequently also pay the provider periodic maintenance and other charges.

Defendants’ advertisements make claims about the efficacy of debt settlement programs, particularly that debt settlement providers will eliminate or significantly reduce consumers’ debt. Defendants have made statements such as:

• “The best debt elimination programs will be in a position to eliminate virtually 60-70% of your balance due. In this market, there were a couple of cases where they’ ve been in a position to eliminate unsecured debt up to 90% of the amount owed.”
• “[Debt relief firms] can eliminate 60% of a buyer’s debt balance roughly but cases in the 70-80% [sic] are not at all rare in this market.”
• “Free Debt Advice and Help – Reduce Your Debt 40 – 60%”
• “The most effective settlement firms in Arkansas will be in a position to get rid of a minimum of 60% of your debt balances and instances within the 70-90% range aren’t at all weird in this marketplace.”
• “Reduce your debt 40% — 60%.”
• “If you have over $10k in unsecured debt it almost always makes financial sense to use a debt settlement company.”
• “Typically, a debt settlement can be settled for 40-60% of the original balance.”
• Debt settlement companies “can take all of your outstanding debt and not only eliminate at least 50% of it but also provide a realistic repayment plan for the rest of your debt.”
• “DisputeDebts.corn is a consumer based service that provides those who are at least $10k in unsecured debt, a legitimate and proven method to reduce that debt up to 70%.”
• “On average, our skilled negotiators are able to help consumers eliminate at least 50% of their unsecured debt balances.”
• “All of our associated debt settlement companies have been approved and accredited by the watchdog in the debt settlement industry and makes [sic] sure that they are properly conducting business according to industry regulations.”
• “Consumers that qualify can typically expect to eliminate at least 50% of their unsecured debt with a legitimate debt settlement program.”
• “So while it’s true that your credit score is going to be negatively affected, millions of consumers are willing to accept this in order to eliminate up to 70% of their unsecured debts.”
• “Fill Out the Form Below Now to Reduce Your Credit Card Debt 50%-70%.”
• “Take Action to Reduce Your Unsecured Debt 50-70%!”
• “In this market, most consumers can expect to eliminate 50-70% of their unsecured debt.”
• “We are not a direct debt relief company and do not handle any of the terms or contracts between the consumer and debt settlement company.
• We are simply an outlet serving on behalf of the consumer to obtain the best possible debt relief options and pair them with top performing companies.”
• “Debt settlement companies are better positioned to successfully negotiate a debt settlement due to their established relationships with various creditors. They can take all of your outstanding debt and not only eliminate at least 50% of it but also provide a realistic repayment plan for the rest of your debt.”
• “In order to be in our network at CreditCardDebtNegotiations.corn, the company must prove above average statistical performance in negotiating credit card debt settlements. We also check the BBB and other accredited organizations to ensure that the companies are properly conducting business and have no outstanding consumer disputes.”
• “FreeDebtReductionHelp.corn has paired thousands of consumers up with debt specialists and has helped them pave a path to serious debt reduction, many times saving up to 60% of what they originally owed.”

At the time Defendants disseminated their advertisements, Defendants did not possess any substantiation for their representations that the debt settlement companies for which they were advertising would substantially reduce or eliminate consumers’ debts. In fact, Defendants rarely, if ever, sought information &om the companies 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. Instead, Defendants merely posted representations that the debt settlement companies provided to them or simply used statements from other debt relief web sites.

Defendants have also solicited consumers using official-sounding advertisements that purport to be from a public, non-commercial program, when in fact the advertisements are commercial in nature and are designed to induce consumers to contact Defendants, thus becoming leads that Defendants sell to commercial debt settlement providers. These advertisements include statements such as:

• “The US government decided to introduce a stimulus package to boost the financial institutions and prevent them &om breaking down. Part of this stimulus money is being utilized by the [c]redit card companies to offer debt settlements to the users.”
• “Government grants are also given by the government to an ordinary man in the recession period. This is not the settlement but the loan amount is given by the government in order to pay off their full debt and it is also tax free. If you are qualified for that you don’t have to pay anything from your pocket.”
• “According to the new debt settlement laws if consumers owe more than $10,000 in debt then they should hire a debt relief firm that negotiates with their creditors in their favor. Creditors should listen to professional negotiator’s appeals and reduce the debt to up to 60%.”

Several of Defendants’ advertisements contain statements which purport to be actual and genuine testimonials &om customers of Defendants’ debt settlement services. These statements convey the impression that consumers can successfully and quickly reduce or eliminate their debts by using Defendants’ purported debt settlement services. The purported customers, however, are not in fact customers of Defendants and their testimonials are not actual and genuine.

Defendants’ advertisements also represent that consumers can become debt free in one to five years. Defendants’ advertisements contain statements such as the following:

• “This process takes about 2 years but it will cover up all your debt and you can start anew with a fresh line of credit.”
• “Debt relief is a legal and sensible way for you to pay off the money you owe over a certain period, typically around 3 years or maybe even less.”
• “Credit card debt management program provides an opportunity for registrants to be debt free in four to five years.”
• “You can find and hire a legitimate debt settlement company to negotiate with your creditors for debt settlement. It can reduce your balance payments and makes it easy to repay your debt in small term [sic] of 12 to 36 months.”
• “Therefore, the bottom-line says once you eke a proper deal with a legitimate debt relief service you need not to be [sic] worried any more. Pay off the easy installments for two years and enjoy a fInancial obligation
  free life forever.”
• “Once you strike a deal with a loyal debt settlement company it will take hardly 2 years to come out of the huge indebtedness.”
• “If you play your cards right, your debt problems will vanish before the first year ends.”
• “Once creditors agree to make a deal, you can get out of debt from 12 to 36 months.”
• “Let us say if you owe $10,000 to a credit card company and take around 38 years to pay the amount with minimum amount paid every month, Settlement Company will try to reduce the debt to $4000 or $5000 and you will be able to clear your debt in 2 — 3 years.”
• “This will help you become debt free in 3 to 5 years.”
• “So you can very well see that debt settlement not only helped you avoid bankruptcy but helped you pay [sic] lot less, in a single payment (instead of paying to several credit card companies separately), less APR and in a time period of just 2-3 years.”
• “The advantages of debt settlement are…. You pay the debt in 2-3 years, instead of paying it for around 30-40 years with a minimum amount every month.”
• “Debt settlements use [sic] time span of 3 years and even lesser [sic] than that, say a year.”
• “You will enjoy a stress free life just within 1 to 2 years whereas bankruptcy takes at least 8 to 10 years.”
• “[A debt management program] usually takes 3-5 years to liberate you completely from the the [sic] advantage is a spotless credit score.”
• “This helps you pay off the debt in 2-3 years flat instead of stretching it for 30 years or so.”

At the time Defendants have disseminated their advertisements, Defendants have not possessed any substantiation for their representations that consumers who enroll in the advertised debt settlement programs would become debt free in a period of one to five years. In fact. Defendants sought virtually no information from the companies to which they sold their leads as to whether the ultimate debt settlement providers who receive those leads provide the results that Defendants represented. Instead, Defendants merely posted representations that the debt settlement companies provided to them or simply used statements &om other debt relief web sites.

You can read the full complaint here.

Sincerely,


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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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