Debt Relief Scam Victims to Receive $1.87M

Consumers who lost money to an illegal telemarketing operation that charged homeowners an upfront fee for debt and mortgage relief services that it never provided, will receive restitution totaling nearly $1.87 million. The money will be sent through an estimated 1,630 checks, with the amount of each check varying based upon the amount of each consumer’s loss.  

Since bringing its action against Expense Management America, a Canada-based scheme, in September 2012, the FTC has obtained a series of orders limiting the defendants’ conduct and collecting money for consumers.

Expense Management America allegedly presented itself as the solution to all the consumer’s financial problems. The defendants cold-called thousands of U.S. consumers from their call center in Montreal since at least mid-2010, including those whose numbers were registered on the Do Not Call Registry, according to the FTC’s original complaint.

The defendants – Expense Management, six affiliated companies and five individuals who operated in Canada and the U.S. – also used a series of Web sites that lured consumers to call them, according to the FTC’s complaint.  After pitching consumers by phone, the defendants allegedly would send brochures and financial documents to consumers via email and obtain their authorization to withdraw funds from their checking accounts.  

Whether the consumer struggled with a mortgage, credit card debt, student loans, car payments or a poor credit score, the defendants allegedly charged an upfront fee of $2,200 to $10,000 that they claimed was being used to pay off debts, according to the complaint. 

One brochure, the Expense Management Guide, allegedly explicitly told consumers that they must follow the "Golden Rule,” which was to cease communicating with their creditors and let the defendants do the talking.

The defendants allegedly claimed that their relationships with lenders and their ability to negotiate on behalf of large groups of consumers made it possible to substantially reduce their payments. But according to the FTC, the defendants failed to produce any of the promised results. 

The complaint named as defendants: E.M.A. Nationwide Inc., also doing business as EMA and Expense Management America; New Life Financial Solutions Inc., also d/b/a New Life Financial and New Life Financial Services; 1UC Inc., also d/b/a 1st United Consultants and First United Consultants; 7242701 Canada Inc.;  7242697 Canada Inc.; 7246293 Canada Inc., 7246421 Canada Inc.; James Benhaim; Daniel Michaels; Phillip Hee Min Kwon; Joseph Shamolian; and Nissim N. Ohayon.