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Via Jeffrey Lapin
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Rescooped by David Slepkow from Nebraska and National Consumer Protection |
Scoop.it!
David Slepkow's insight:
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.
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The Federal Trade Commission (FTC) announced that a Florida U.S. District Court issued a contempt order against Byron Wolf and Roy Eliasson for continuing to operate a scheme defrauding consumers, which was in violation of a a 2008 permanent injunction. This contempt order requires the pair to pay $14.75 million, which is the amount they illegally took from consumers.
After a hearing, the Florida court found that these two individuals had "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: FTC Press Release (January 31, 2014)
By: Jeffrey Lapin of Lapin Law Offices