Scam alert: Feds seek to shut down phony credit repair and debt relief scheme
Continuing its mission to protect American consumers, the Federal Trade Commission (FTC) has filed suit against unnamed defendants operating as American Bill Pay Organization and American Benefits Foundation in an effort to halt allegedly fraudulent and deceptive debt relief and credit repair practices targeted at financially distressed individuals.
In requesting immediate injunctive relief, the FTC’s complaint targets the operators of two websites that were allegedly full of misrepresentations about the fake program. Falsely branded as the “Bill Payment Government Assistance Program,” claims included that they were funded by the federal government and could help individuals with low credit scores.
Websites advertising the fake program also claimed a false endorsement by President Barack Obama and governance by the Recovery Accountability and Transparency Board, a government agency formed to oversee projects funded by the American Recovery and Reinvestment Act of 2009.
In addition to claiming false affiliations with and endorsements from the Recovery Accountability and Transparency Board, the U.S. Department of Treasury and other federal agencies, the complaint alleges that YouTube videos created by American Bill Pay Organization and American Benefits Foundation included a purported personal endorsement from Obama with an audio recording stating, “I approve this message.”
“Simply amazing how the general public could fall for such a scheme,” former police officer Remington Longstreth — himself an identity theft victim — said. “With a bit of investigation and diligence, an informed consumer wouldn’t fall for such a scam.”
According to the complaint filed in the U.S. District Court for the District of Columbia, the unnamed defendant’s — operating as American Bill Pay Organization and American Benefits Foundation — purported to offer up to $75,000 in debt relief to consumers, along with promises that their credit scores would “increase within 30 days.” The alleged scammers told consumers that in exchange for an advance “service charge” of $900 to $1,100, the defendants would pay off the consumers’ debts.
The complaint further alleged that the scammers would obtain information about a consumer’s debt — including account numbers — and then arrange bogus electronic payments to creditors. These payments were made to create the impression their debts were in fact being paid. The scammers would then tell consumers to pay the “service charge,” typically through money transfer services such as MoneyGram or Western Union.
Once consumers paid the service charge to American Bill Pay Organization and American Benefits Foundation, the scammers would then reverse the payments made to consumers’ bills, leaving them without the promised debt relief or improvements to their consumer credit reports or credit scores.
The FTC’s complaint charges the unnamed defendants with two counts of violating the FTC prohibition on deceptive acts or practices, as well as two counts of violating the Credit Repair Organizations Act’s prohibitions on collecting advance fees before providing credit repair services and making untrue or misleading representations about their services. The FTC complaint further asked the court to take steps to halt the scam immediately and for a permanent order stopping the defendants’ activities and requiring them to give up their ill-gotten gains.
The Federal Trade Commission works to prevent mortgage relief, credit repair and loan modification scams. To file a complaint, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website also provides free information on a variety of consumer topics at www.ftc.gov.
William E. Lewis Jr., KSL
Bill Lewis is the principal of William E. Lewis Jr. & Associates and host of "The Credit Report with Bill Lewis" — a daily forum for business and financial news, politics, economic trends and issues on AM 740 WSBR in south Florida.
