The telemarketing business will be permanently off limits to a pitchman whom the Federal Trade Commission sued last year for allegedly tricking consumers into paying hundreds of dollars for a credit card that could only be used to buy merchandise from his companies' Web sites.
The FTC announced a settlement order last week with James Nicholson and a group of companies he controls, related to an advance-fee credit card scam and an advance-fee, interest rate reduction/debt-negotiation program.
The FTC had alleged the defendants debited consumers' bank accounts without permission, failed to tell consumers they would not be able to get a refund and illegally called consumers whose names were on the National Do Not Call Registry. Under the settlement order, Nicholson and his companies will pay more than $200,000.
The FTC filed a complaint in 2009 charging Nicholson and several of his businesses with using deceptive telemarketing pitches to offer consumers with poor or no credit a general-use credit card in exchange for an up-front fee of as much as $250.
Telemarketers working for Nicholson's chief company, Group One Network, also claimed that consumers would gain access to a large line of credit that could be used for cash advances, and that their payment histories would be reported to the three major credit bureaus.
In reality, consumers who paid the fee received an online shopping card they could only use to buy products from Group One's Web sites and could not be used for cash advances, and their credit histories were never reported to the credit bureaus.
The settlement bans Nicholson, a repeat offender who pleaded guilty to wire fraud in connection with fraudulent telemarketing in 1995, from telemarketing and from selling advance-fee loans or credit cards.
Nicholson could not be reached for comment.