Thursday, May 6, 2004

Company accused of bilking debtors


Government says firm also violated 'do not call' list

By Jennifer C. Kerr
The Associated Press

WASHINGTON - Federal regulators on Wednesday charged a California-based credit repair company with bilking tens of millions of dollars from people who sought help managing their debts.

A lawsuit by the Federal Trade Commission accuses the National Consumer Council of deceptive claims and practices that harmed thousands of people.

The agency said the council wrongly billed itself as a nonprofit and scammed people when they were enrolled in debt-settlement programs where the company was supposed to negotiate a one-time fee the customers would pay to creditors.

Instead, the FTC said, the council charged hundreds of dollars in hidden fees and delayed payments to creditors for six months or longer. Consumer racked up late payments, interest fees and other charges, digging themselves further into debt. Many were forced into bankruptcy, the FTC said.

The FTC also charged the council with violating the government's "do not call" registry. The agency said it logged more than 1,000 complaints from consumers who placed their phone numbers on the list but still received calls from telemarketers for the council.

This is the first enforcement action taken by the FTC because of an alleged violation of the popular registry set up last fall to block many unwanted telemarketing calls.

"These defendants lied about their nonprofit status and intentionally put consumers in harm's way financially," said Howard Beales, director of the FTC's Bureau of Consumer Protection. "NCC was calling people they shouldn't have been calling, and claiming things they shouldn't have been claiming."

The agency is seeking millions of dollars in damages on behalf of NCC's customers.

Several calls to the Santa Ana-based company were not returned. At the FTC's request, a judge has appointed a receiver to take over the council's business.

Nearly two dozen companies and individuals were named in the lawsuit, including the council's president, Harvey Warren, and four affiliated companies: London Financial Group; National Consumer Council, a Nevada corporation; National Consumer Debt Council; and Solidium.




BUSINESS HEADLINES
Property firm sues over use of name
Delta flyers can join suit over hub pricing
Peale: Dodge dealer driving off family-owned lot for good
IRS sues over no-tax Web sites
Treasury selling new bond, note
Chamber Expo's focus: Building business
CVS chief seeks drug import test
Highest safety rating elusive
Some SUVs rated safer than others
Company accused of bilking debtors
Tristate business summary
Business Digest
Business People