FTC Settlements Crack Down on Payment Processing Operation

For Release: 11/18/2013

FTC Settlements Crack Down on Payment Processing Operation that Enabled ‘Google Money Tree’ Scammers to Charge Consumers $15 Million in Hidden Fees

The Federal Trade Commission is continuing its crackdown on payment processing operations that enable scam artists to charge consumer accounts despite signs ofSeal of the United States Federal Trade Commis...

ongoing fraud and unauthorized transactions.  Today, the Commission announced a proposed settlement resolving allegations that a payment processor, Process America Inc., and its owners, Kim Ricketts, Keith Phillips and Craig Rickard, used unfair tactics to open and maintain scores of merchant accounts for Infusion Media Inc., which perpetrated the “Google Money Tree” work-at-home scheme.  Using these merchant accounts, Infusion Media charged more than $15 million in unauthorized charges on consumers’ debit and credit card accounts.

Payment processors and Independent Sales Organizations (ISOs) enable merchants to charge consumers’ credit cards for products and services.  In exchange, payment processors and ISOs get paid for each payment transaction the merchant processes.

In June 2009, the FTC charged the Infusion Media defendants  with falsely claiming that consumers could earn $100,000 in six months, misrepresenting an affiliation with Google, and tricking consumers into signing up for automatic monthly charges that would continue until the consumer took affirmative steps to cancel.

The complaint against Process America alleges that the defendants knew or should have known that they were processing charges that consumers had not authorized.  Evidence that consumers were being charged without their permission included plainly deceptive statements on merchant websites, notices that the merchant should be placed in Visa and MasterCard chargeback monitoring programs, and chronically excessive chargeback rates – the percentage of charges that are challenged by consumers and result in the charges being reversed.   From 2008 through 2009, the defendants opened and maintained 131 merchant accounts through which the perpetrators processed more than $15 million in unauthorized charges on consumer debit and credit card accounts.

To keep Infusion Media’s merchant accounts open, the defendants allegedly engaged in tactics that were designed to evade fraud monitoring programs implemented by Visa and MasterCard.  These tactics included submitting merchant applications containing false information and “load balancing” – distributing transaction volume among numerous merchant accounts.  As a result, Infusion Media’s scam operated for nearly a year, and Process America continued to earn fees from its payment processing activity.

To resolve the allegations in the complaint, the individual defendants have agreed to separate permanent injunctions containing prohibitions and restrictions on their future payment processing activities:

  • Rickard is banned from payment processing and acting as an ISO.  He is prohibited from acting as a sales agent for any client engaged in (a) unfair or deceptive business practices; (b) certain categories of high-risk activities, including negative-option marketing (where the seller interprets consumers’ silence or inaction as permission to charge them), money-making opportunities, credit card or identity theft protection, timeshare resale services, buying clubs, medical discount plans; or (c) conduct that has qualified a client for a chargeback monitoring program.
  • Rickard is also prohibited from acting as a sales agent for any client without first screening them for unfair or deceptive business practices.  The order imposes a judgment of more than $184,000 that will be suspended based on his inability to pay.  The full judgment will become due immediately if Rickard is found to have misrepresented his financial condition.
  • Ricketts and Phillips are prohibited from acting as payment processors, ISOs, or sales agents for any client engaged in (a) unfair or deceptive business practices; or (b) certain categories of high-risk activities certain categories of high-risk clients.  They also are barred from acting as a sales agent for any client without screening and monitoring them for unfair or deceptive business practices.

In addition, Process America’s Chief Restructuring Officer has agreed to recommend and seek authority from the United States Bankruptcy Court for the Central District of California to enter into the proposed settlement with the FTC.  Under the proposed settlement:

  • Process America is prohibited from payment processing or acting as an ISO or sales agent for any client engaged in negative-option marketing or unfair or deceptive business practices, and from failing to screen, monitor, and promptly investigate clients for such practices.

The orders prohibit all of the defendants from selling or otherwise benefitting from consumers’ personal information, and failing to properly dispose of customer information.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent judgment was 4-0.  The proposed settlement with Process America is subject to the United States Bankruptcy Court for the Central District of California’s approval of a Federal Rule of Bankruptcy Procedure 9019 Motion for Compromise.  The proposed consent judgments with Process America and the individual defendants are also subject to court approval.

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Frank Dorman,
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Karen S. Hobbs
Bureau of Consumer Protection
202-326-3587Benjamin R. Davidson
Bureau of Consumer Protection
202-326-3055

________________________

Federal Trade Commission v. Process America, Inc.; Craig S. Rickard; Kim Ricketts; and Keith Phillips, Defendants.

(United States District Court for the Central District of California)

FTC File No. 102 3184

November 18, 2013

FTC Charges Marketers with Making Unsubstantiated Claims

For Release: 12/02/2010

FTC Charges Marketers with Making Unsubstantiated Claims that They Could Eliminate Consumers’ Debt

As part of its continuing crackdown on scams that target consumers in financial distress, the Federal Trade Commission has charged three debt relief operations

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

with making unsubstantiated claims to lure consumers nationwide into paying thousands of dollars in up-front fees, but failing to reduce credit card debts as promised.

According to the FTC’s two complaints, the defendants made deceptive claims that consumers who enrolled in their programs could eliminate 30 to 60 percent of their credit card debt and be out of debt in 18 to 36 months. The defendants marketed their services via websites and TV and radio ads that urged consumers to call toll-free numbers for a free consultation and to enroll in their debt relief programs. One operation claimed to use “secret programs most credit card companies won’t tell you about.” The other operation touted its “established relationships” with creditors and claimed that its program would “save you literally thousands of dollars.” The defendants charged consumers up-front administrative fees, monthly maintenance fees, negotiation fees, and in some instances, a cancellation fee.

The FTC’s complaints charge that few consumers received the promised results. Many consumers canceled or dropped out of the programs before their debt was reduced because they couldn’t afford to pay the defendants’‘ sizable advance fees and accumulate money to pay off their debts.

Consumers looking for help with credit card debt should be wary of anyone who tells them to stop paying their bills, to pay someone other than their creditors, or to stop talking to their creditors. Consumers should also be careful about paying for financial assistance before they receive it. The FTC recently announced changes to the Telemarketing Sales Rule that prohibit companies that sell debt relief services over the telephone from charging fees before they settle or reduce a customers’ credit card or other unsecured debt. This ban on advance fees protects all consumers who enroll in a debt relief service after October 27, 2010, and specifies that fees for debt relief services may not be collected until:

  • the debt relief service successfully settles or changes the terms of at least one of the consumer’s debts;
  • there is a settlement agreement, debt management plan, or other agreement between the consumer and the creditor that the consumers has agreed to; and
  • the consumer has made at least one payment to the creditor as a result of the agreement negotiated by the debt relief provider.

The new provisions of the Rule also prevent debt relief providers from front-loading their fees if a consumer has enrolled multiple debts in one debt relief program. Click here for more information about the advance-fee ban. In addition, the Rule requires debt relief providers to make truthful and substantiated claims about their services. The FTC will actively enforce the Rule and these new provisions, as will the states, which also have enforcement authority under the Telemarketing Sales Rule.

The defendants in one of the two cases announced today are Financial Freedom of America, Inc., now known as Financial Freedom Processing Inc., Corey Butcher, and Brent Butcher. The second case names Debt Consultants of America Inc., Debt Professionals of America Inc., Robert Creel, Corey Butcher, and Nikki Creel, also known as Nikki Vrla.

The Commission vote to file the complaints was 5-0. The complaints were filed in the U.S. District Court for the Northern District of Texas, Dallas Division.

Click here for facts about settling credit card debts.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

MEDIA CONTACT:
Frank Dorman,
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Anne LeJeune, FTC’s Southwest Region
Financial Freedom Processing
214-979-9371Shereen El Domeiri, FTC’s Southwest Region
Debt Consultants of America
214-979-9395
 

(FTC File Nos. 0923056, 0923152)
(Financial Freedom, Debt Consultants)

____________________________

Federal Trade Commission, Plaintiff
v.
Financial Freedom Processing, Inc.,
formerly known as Financial
Freedom of America, Inc., a corporation;
Corey Butcher, individually and as an officer of the corporation; and Brent Butcher, individually and as an officer of the corporation,
Defendants.

(United District Court for the Northern District of Texas)

Case No. 3:10-cv-02446

FTC File No.  092 3056

December 2, 2010

FTC Stops Online ‘Yellow Pages’ Scam

For Release: 11/19/2013

FTC Stops Online ‘Yellow Pages’ Scam; Canada-Based Operation Targeted Small Businesses and Churches in United States

At the Federal Trade Commission’s request, a federal judge has temporarily halted, and frozen the assets of, a Montreal operation that bilked more than $14

Seal of the United States Federal Trade Commis...

Seal of the United States Federal Trade Commission. (Photo credit: Wikipedia)

million from small businesses and churches in the United States for unwanted listings in online business directories. The FTC seeks to permanently stop the illegal practices and make the defendants return victims’ money – the scheme has generated more than 13,000 complaints from consumers.

“Hiding behind borders to scam churches and small businesses is a tactic that we’ve seen before,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Scammers need to know that we have great relationships with our law enforcement partners in Canada and, as this case shows, we can and will work together to protect our consumers.”

According to court papers filed by the FTC, the defendants operated from Montreal, using corporate shells and mail drops in the U.S. to hide their actual location. Typically, they made phone calls pretending they were verifying contact information to update or confirm existing directory listings. In some cases, the defendants said they were calling in response to a cancellation request, and asked to verify the organization’s contact information to confirm the cancellation. In fact, the defendants had no prior relationship with the consumers.

The bills sent by the defendants averaged $499.99 or more and had a “walking fingers” image often associated with a local yellow pages directory. Some consumers paid, thinking someone in their organization had ordered these listings. Other consumers paid after the defendants used partially recorded phone conversations with consumers who had verified their contact information to convince them that they had a binding oral contract with the defendants, according to the FTC’s complaint.

Consumers who ignored the bills or refused to pay received collection calls and dunning notices, often with added interest charges, late fees, and legal fees, as well as threats of collection agency referral, credit rating damage, and legal action, the FTC alleged. To make consumers believe third-party debt collectors were involved, the defendants created two debt collection companies, CC Recovery and M&A Recovery, which also made threats. The defendants’ threats convinced many consumers to pay the bills, the FTC alleged.

The FTC’s complaint alleges that the defendants violated the FTC Act by misrepresenting that they had a preexisting business relationship with consumers, that consumers had agreed to buy directory listings, and that consumers owed them money.

The defendants are Mohamad Khaled Kaddoura, Derek Cessford, and Aaron Kirby, and 15 companies they ran: Modern Technology Inc., also doing business as Online Local Yellow Pages; Strategic Advertisement Ltd., also d/b/a Local Business Yellow Pages; Dynamic Ad Corp., also d/b/a Yellow National Directory and Yellowpages Local Directory; Wisetak Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Wisetak, Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages; Internet Solutions LLC, also d/b/a Public Yellow Pages; Yellow Pages Express Inc., also d/b/a Yellow Pages Express; Yellow Pages Online Inc., also d/b/a Yellow Pages Online; CessTech Inc., also d/b/a Yellow US Pages; SEO Online Inc., also d/b/a Yellow Local Directory; SEO Online LLC; SEOOnline, also d/b/a Public Yellow Pages; SEM Pundits Inc., also d/b/a Yellow Pages Online; CC Recovery Corporation, also d/b/a CC Recovery; and M&A Recovery Inc., also d/b/a MA Recovery.

The FTC would like to thank the Canadian Anti-Fraud Centre; the Attorneys General of Illinois, Florida, New York, Nevada and Vermont; the Wisconsin Department of Agriculture, Trade and Consumer Protection; the Better Business Bureaus of Arkansas and of Chicago and Northern Illinois; and the Kahnawake Mohawk Peacekeepers for their valuable assistance with this matter.

The FTC also would like to acknowledge the Royal Canadian Mounted Police (RCMP news release in English and French) and the Centre of Operations Linked to Telemarketing Fraud (Project COLT) for their valuable assistance. Launched in 1998, Project COLT combats telemarketing-related crime, and includes members of the Royal Canadian Mounted Police, Sureté du Québec, Service de Police de la Ville de Montréal, Canada Border Services Agency, Competition Bureau of Canada, Canada Post, U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement and the U.S. Secret Service), the U.S. Postal Inspection Service, the Federal Trade Commission, and the Federal Bureau of Investigation. Since its inception, Project COLT has recovered $22 million for victims of telemarketing fraud.

To learn more about directory scams, read the FTC’s When Yellow Pages Invoices are Bogus and Throwing the Book at Business Directory Scams.

The Commission vote authorizing the staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:
Frank Dorman
Office of Public Affairs

202-326-2674
STAFF CONTACT:
Guy G. Ward
Bureau of Consumer Protection
312-960-5612

___________________________

Federal Trade Commission, Plaintiff, v. Modern Technology Inc., also doing business as Online Local Yellow Pages; Strategic Advertisement LTD., also doing business as Local Business Yellow Pages; Dynamic Ad Corp., also doing business as Yellow National Directory and Yellowpages Local Directory; Wisetak Inc., also doing business as Online Public Yellow Pages and US Public Yellow Pages; Wisetak, Inc, also doing business as Online Public Yellow Pages and US Public Yellow Pages; Internet Solutions, LLC, also doing business as Public Yellow Pages; Yellow Pages Express Inc., also doing business as Yellow Pages Express; Yellow Pages Online Inc., also doing business as Yellow Pages Online; Cesstech Inc., also doing business as Yellow US Pages; SEO Online Inc., also doing business as Yellow Local Directory; CC Recovery Corporation, also doing business as CC Recovery; M&A Recovery Inc., also doing business as MA Recovery; SEO Online, LLC; Seoonline, also doing business as Public Yellow Pages, Sem Pundits Inc., also doing business as Yellow Pages Online; Mohamad Khaled Kaddoura, also known as KAL; Derek Cessford; and Aaron Kirby, Defendants
( United States District Court for the Northern District of Illinois)

Case No. 13cv8257
FTC File No. 132 3144

November 19, 2013

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scamFRAUDalert see it appropriate to issue this ALERT as Cambridge Media Series, LLC d/b/a http://www.Drivers-Licenses.orgconsumer alert appears to be offering it’s services nationwide and claim not to be affiliated with any state or governmental agencies. This is a paid for service site.

The site claim to be a comprehensive resource for drivers. However, the Better Business Bureau have expressed concerns and indicated that the site owner(s) have shown an unwillingness to work with them to resolve consumers complaiints.

The complaint history focus on deception and misrepresentation. Services provided are links to your local DMV offices for a fee which can easily be found online.

Cambridge Media Series, LLC
D/B/A Drivers-Licenses.org

1521 Alton Road, #488,
Miami Beach, FL 33139
info@Drivers-Licenses.org
(888) 242-8786
http://www.drivers-licenses.org

scamFRAUDalert remain willing to removing this complaint if and when the site owner(s) can address these complaints.

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kansasdriverslicenses.org – drivers-licenses.org

scamFRAUDalert see it appropriate to issue this ALERT as Cambridge Media Series, LLC d/b/a http://www.Drivers-Licenses.orgconsumer alert appears to be offering it’s services nationwide and claim not to be affiliated with any state or governmental agencies. This is a paid for service site.

The site claim to be a comprehensive resource for drivers. However, the Better Business Bureau have expressed concerns and indicated that the site owner(s) have shown an unwillingness to work with them to resolve consumers complaiints.

The complaint history focus on deception and misrepresentation. Services provided are links to your local DMV offices for a fee which can easily be found online.

Cambridge Media Series, LLC
D/B/A Drivers-Licenses.org

1521 Alton Road, #488,
Miami Beach, FL 33139
info@Drivers-Licenses.org
(888) 242-8786
http://www.drivers-licenses.org

scamFRAUDalert remain willing to removing this complaint if and when the site owner(s) can address these complaints.

  • drivers-licenses.org
  • TexasDriversLicenses.org
  • missouridriverslicense.org
  • info@drivers-licenses.org
  • iowadriverslicenses.org
  • nevadadriverslicenses.org
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