The defendants, Jonathan Greenberg, Hermosa Group LLC, Media Innovations LLC, and Financial Future Network LLC, have also been fined $500,000 to settle the charges.According to the FTC's complaint, the defendants, doing business as The Hermosa Group and Financial Future Network, ran deceptive debt relief service commercials on the radio and television. The ads, which were broadcast in both English and Spanish, made empty promises about their ability to help consumers reduce their credit card debt by thousands of dollars.
The defendants, however, didn't provide any debt relief services. The sole purpose of the ad campaign was to lure unsuspecting consumers into calling their toll-free number, the FTC said. The names and numbers of these consumers were then sold to debt-relief providers as sales leads.
The defendants' ads included sales pitches such as:
- "With one simple call you can eliminate your debt in a fraction of the time and for less than you owe."
- "Find out today how quickly and easily you can eliminate your debt."
- "Stop the harassing calls!"
Greenberg, Hermosa Group LLC, Media Innovations LLC, and Financial Future Network LLC were fined $8.5 million under the settlement, which will be suspended when they pay $500,000. The full penalty will be due immediately if Greenburg is found to have lied about his financial condition.
In addition to banning the defendants from the debt-relief business, the settlement prohibits them from making unsubstantiated claims about financial-related products or services, or misrepresenting material facts about any product or service. The order also prohibits them from disclosing or otherwise benefiting from customers' personal information, and failing to dispose of this information properly.
The FTC recently amended its Telemarketing Sales Rule to require debt relief companies to make certain disclosures and prohibit them from making false claims or collecting fees before delivering the services they promise. Because the defendants' ads predated these changes, the FTC didn't pursue any violations of the new rules.
For more information from the FTC about settling credit card debts, click here.