The operators of an advance fee recovery scheme that falsely claimed it could recover money that consumers had lost to telemarketing scams will be banned from selling recovery services, and from telemarketing, under a court order issued at the Federal Trade Commission’s request.
The court order resolves a 2014 FTC complaint that charged Consumer Collection Advocates and Michael Robert Ettus with illegally collecting money from consumers, many of them elderly people harmed by timeshare resale and precious metal investment frauds.
Telemarketers for Consumer Collection Advocates and Ettus, according to the FTC's complaint, called consumers and falsely guaranteed that, for an upfront fee, typically 20% of the amount they lost, the defendants would recover substantial amounts of money for them – 60% or more – within 30 to 180 days.
For consumers who had lost from several thousand to hundreds of thousands of dollars and could not afford a 20% advance fee, the defendants often would accept a reduced fee of less than 10% of their loss. The defendants also charged a back-end fee of 20% for any amount recovered.
The court subsequently prohibited the defendants, pending resolution of the case, from misrepresenting that consumers who bought their services would recover, or were likely to recover, a substantial portion of money they had lost.
The final order of permanent injunction announced Monday also prohibits the defendants from misrepresenting any product or service, collecting payments for any recovery service, selling rights to collect for such service, profiting from customers’ personal information, and failing to properly dispose of customer information. The order imposes a judgment of more than $2.8 million.
The U.S. District Court for the Southern District of Florida issued the final order of permanent injunction. The defendants have appealed the court’s decision.