Compliance Management, Privacy

FTC asks court to shut down debt relief scam

A phony debt relief and credit repair program will likely have its wings clipped after the Federal Trade Commission (FTC) petitioned a federal court to shut it down, saying the program coerced account numbers and other private information from distressed citizens then arranged “bogus electronic payments” to trick them into believing their debt was being paid.

The “Bill Payment Government Assistance Program” violated the FTC Act prohibiting deception acts when it claimed to be funded by the federal government and endorsed by President Obama and violated the Credit Repair Organizations Act by collecting fees in advance of providing credit repair services.

The FTC complained that the scammers offered up to $75,000 in debt relief and a boost to credit scores within 30 days then promised to payoff their debt if consumers ponied up advanced service charges between $900 to $1,100.

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