With an improved economy and real estate prices on the rise, your good name and reputation are more important than ever when applying for new credit cards, an automobile, rental property or home mortgage. Many creditors have tightened their lending guidelines, effectively barring millions of Americans from borrowing money.
Long gone are the days of obtaining credit, goods, benefits, services and/or employment with a 620 FICO score. In most instances, a borrower will be denied if they maintain a credit score lower than 740. Even those with high credit scores have experienced reduced credit lines or closed credit card accounts and equity lines. When an account has not been closed, credit limits have been reduced to the existing balance due.
Mortgage lenders, auto finance companies, credit card issuers, credit unions and traditional banks have all raised the bar. Borrowers with low FICO scores can expect to be denied credit or to pay significantly higher interest rates than those with excellent repayment histories.
With about 52 percent of credit profiles at the Equifax, Experian or TransUnion consumer reporting agencies containing some sort of error or omission materially impacting credit worthiness, some turn to credit repair to remedy low credit scores and issues that prevent them from borrowing money. Absent self-help and the “do-it-yourself” approach, they hire a credit service organization in the restoration of their good name and reputation.
The terms credit repair, credit restoration or credit rehabilitation are somewhat synonymous. Those with bad repayment histories cannot afford to ignore the potential benefits of credit repair. In today’s economy, a strong FICO score is more important than ever.
Beware, though, when hiring a credit repair company.
Most — but not all — credit service organizations specialize in the restoration of consumer credit worthiness as well as issues related to identity. Assuming that the credit repair company is performing within established guidelines, they utilize laws enacted by Congress to dispute negative, erroneous, obsolete and/or fraudulent information contained within your consumer credit profile.
Utilizing the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Fair Credit Billing Act and the Fair and Accurate Credit Transactions Act, a reputable credit service organization will assist in the submission of disputes electronically, verbally and in writing to the Equifax, Experian and TransUnion consumer reporting agencies. Disputes are also submitted to creditors, collection agencies, and third-party record providers, in addition to state, federal, and local regulatory authorities.
Unlike most credit repair clinics that submit the same written complaint letters monthly, a reputable credit repair company will have devised a strategy whereby disputes are submitted electronically, verbally and in writing over a long period of time to the credit reporting agencies, creditors, collection agencies and third-party record providers reporting negative, inaccurate, obsolete and erroneous information.
Keep in mind that anything a credit repair company can do, you can do yourself for little to no cost. With that said, a reputable credit service organization should have an edge over consumer driven disputes as they will possess the education, knowledge and a source proven method that is generally unknown to the average consumer.
A reputable credit service organization should have a provable track record of results in the modification or removal of erroneous and inaccurate judgments, liens, mortgage foreclosures, bankruptcies, short-sales, student loans, credit inquiries, derogatory accounts and collection agency entries, personal identifiers and other transient data from a consumer’s credit report. Although the credit restoration process can take many months, most individuals should see some results within the first 45 to 60 days.
Credit repair, credit restoration and credit rehabilitation is as legal as pleading “not guilty” in a court of law. One must understand, though, that most credit service organizations are not law firms and that their employees may not be licensed to practice law. As such, even a reputable credit repair company cannot provide legal advice, nor may they represent a consumer before any court or in any legal proceeding. In the event that legal representation is required, the credit repair company should provide an appropriate attorney referral for consultation.
When self-help or the “do-it-yourself” approach is not feasible and you decide to hire a credit repair company to restore your credit, be sure to check them out. While the majority of credit repair clinics are scams, a few good ones do exist. Consumers can check out a credit service organization through their state Attorney General, the Federal Trade Commission at http://www.ftc.gov or through the Better Business Bureau at http://www.BBB.org.
The FTC is seeking a court order to permanently bar T-Mobile from “cramming,” or charging cellphone customers for spam text messages that they did not request or have an interest in receiving.
In a process known as “third-party billing,” carriers such as T-Mobile, AT&T, Sprint and Verizon typically place charges on a consumer’s bill for services provided by another company. In return, the phone company receives a substantial percentage of the amount charged.
When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.”
T-Mobile — which brands itself as a low-cost alternative to top rivals AT&T and Verizon — received between 35 and 40 percent of the amount it charged customers for the bogus texts subscriptions, thus generating hundreds of millions of dollars in revenue, the FTC alleged.
“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” FTC Chairwoman Edith Ramirez indicated in a prepared statement. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”
The Federal Communications Commission (FCC) is also launching an investigation into T-Mobile’s billing practices and has the power to level fines against the company if it determines that wrongdoing has occurred.
According to the complaint filed by the FTC, T-Mobile allegedly charged customers for spam texts — “such as flirting tips, horoscope information or celebrity gossip” — at a typical cost of $9.99 per month. T-Mobile also ignored signs that the text messages were unwanted — such as a large number of customers seeking refunds — and made it difficult to discover and remove the charges.
“Rather than going after T-Mobile, the FTC should focus on the third-party companies that are sending the text messages,” argued T-Mobile CEO John Legere.
“As a single mother, I can hardly afford to pay additional and fraudulent fees,” T-Mobile customer Bina Fink Kohl of Weston told Examiner. “As a T-Mobile customer, I expect them to be fair and honest in their dealings. From the litigation, it appears that T-Mobile has been scamming me all along.”
According to T-Mobile, they have already made commitments to stop billing for unwanted spam text messages and issue refunds for unwanted text messages.
“T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors,” stated Legere.
According to Jessica Rich of the FTC’s Bureau of Consumer Protection, the agency and T-Mobile have not been able to reach a settlement on the charges, resulting in the litigation filed Tuesday by the Federal Trade Commission.
“In court we will determine just how much” T-Mobile needs to refund its consumers, but “our evidence to date is that hundreds and millions of dollars are at stake,” Rich said. “Our first priority is to get the money back to consumers.”
Rich called the charges against T-Mobile — the agency’s first cramming charges against a telecom company — “a new front in [the federal agency’s] longstanding campaign” against wireless cramming.
The T-Mobile case “sends a strong message to other mobile phone companies,” Rich concluded. “We will continue to bring additional cases to deter this conduct.”
According to the Federal Trade Commission complaint, many of the allegations focus on T-Mobile billing practices, which “made it difficult for consumers to detect that they were being charged, much less by whom.”
Customers would have to scan through several screens online and up to 50 pages of a physical bill to find obscure and fraudulent accounting for the third-party charges, the FTC said.
Among the allegations were that prepaid customers – who do not receive monthly bills – would have the third-party charges deducted automatically. Once customers discovered the charges and their source, T-Mobile would refuse to fully refund the charges, sometimes directing the customers to contact the third-parties.
“I’m alarmed that T-Mobile is accused of fraudulent billing practices,” Remington Longstreth told Examiner. “I never check my bill completely. With that said, I don’t expect to be cheated either.”
The federal investigation and complaint against T-Mobile comes at no worse time as the company is reportedly in talks to be bought by Sprint. This highly-anticipated deal would combine the country’s third- and fourth-largest wireless companies.
Legere concluded by calling the lawsuit against T-Mobile “sensationalized legal action” that is “unfounded and without merit.”
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As a nationally recognized credit repair and identity theft expert, Bill Lewis is principal of William E. Lewis Jr. & Associates, a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, announced late Friday that Michael Ali Bryant, Sr., and his wife, Latina Rashawn Bryant, both of Lauderdale Lakes, were sentenced for their participation in a stolen identity tax refund scheme, according to the U.S. Attorney’s Office for the Southern District of Florida.
Michael Bryant, 41, was sentenced to 144 months in prison, to be followed by three years of supervised release. Latina Bryant, 43, was sentenced to 48 months in prison, to be followed by three years of supervised release.
Having previously pled guilty to one count of aggravated identity theft, Michael Bryant also pled guilty to one count of possession of fifteen or more unauthorized access devices.
Latina Bryant previously pled guilty to one count of aggravated identity theft and one count of using an unauthorized access device.
Co-defendant Marquis Onigirin Moye, 24, of Pompano Beach, was sentenced on March 28, 2014 to 54 months in prison, to be followed by three years of supervised release. Moye previously pled guilty to one count of possession of fifteen or more unauthorized access devices, and one count of aggravated identity theft.
Co-defendants Tiffany Shenae Cooper, 33, of Deerfield Beach, and Angela Dione Rosier, 41, of Coral Springs, were sentenced on February 28, 2014. Cooper was sentenced to 57 months in prison, to be followed by three years of supervised release. Rosier was sentenced to 49 months in prison, to be followed by three years of supervised release. The court also ordered both defendants to pay $129,390.06 in restitution to the IRS and the medical services provider whose database had been breached.
Cooper previously pled guilty to one count of possession of fifteen or more unauthorized access devices and one count of aggravated identity theft. Rosier previously pled guilty to one count of conspiracy to commit access device fraud.
According to court records, a confidential source initially approached Michael Bryant and inquired about purchasing narcotics. Bryant told the operative that he did not have any narcotics but that he did have personal identity information that he was willing to sell. A controlled purchase of approximately 230 names was made.
Bryant instructed the operative on how to commit tax fraud and provided specific instructions on what information to enter into the web pages of the internet-based tax services to obtain a tax refund.
An examination of the records revealed that they were from a medical services provider.
Rosier was an employee of the medical services provider. Cooper spoke to Rosier to obtain user names and passwords for current employees of the medical services provider. Cooper admitted to illegally logging on to the medical services provider’s computer network and downloading personal information for the purpose of committing various types of fraud. She was assisted in her activities by Rosier and co-defendant Moye.
Ferrer commended the investigative efforts of the FBI and IRS-CI. The case was prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
Identity theft and tax return identity theft charges were announced Thursday against 25 defendants in 19 separate cases, according to United States Attorney for the Southern District of Florida, Wifredo A. Ferrer.
Dealing with thousands of stolen identities and millions of dollars of fraudulent identity theft tax filings, the charges filed reaffirmed the joint federal and local commitment to crack-down on stolen identity tax refund fraud (SIRF) perpetrators.
Florida – according to the Federal Trade Commission – had the highest rate of identity theft in the nation last year. It had a rate of 192.9 complaints per 100,000 residents – the highest in the United States .
While identity theft in Florida ranks highest in the United States, the identity theft rate in Miami has reached near epidemic proportions – with a rate of 340.4 complaints per 100,000 residents.
In an attempt to combat the rising wave of stolen identity tax refund scams and armed with recent directives from the Department of Justice’s Tax Division making prosecutions faster and easier, the U.S. Attorney’s Office for the Southern District of Florida established the South Florida Identity Theft Tax Fraud Strike Force (Strike Force) in August 2012.
The members of the Strike Force include the United States Attorney’s Office, Internal Revenue Service, Criminal Investigation, Miami Field Office, Federal Bureau of Investigation, Miami Field Office, U.S. Secret Service, U.S. Postal Inspection Service, Miami Division, Social Security Administration, Office of Inspector General, Aventura Police Department, North Miami Beach Police Department, Miami-Dade Police Department, Immigration and Customs Enforcement, Homeland Security Investigations, Miami Field Office, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, Town of Davie Police Department, Florida Highway Patrol, Lee County Sheriff’s Office, Broward Sheriff’s Office, Ft. Lauderdale Police Department, Coconut Creek Police Department, Sunrise Police Department, Coral Springs Police Department, Miramar Police Department and North Miami Police Department.
Since the inception of the Strike Force, 296 defendants – responsible for approximately $485.5 million in intended stolen identity refund fraud loss and in excess of $106 million in actual SIRF fraud loss – have been charged in federal court.
The U.S. Attorney’s Office and the IRS have also attacked this problem by revoking “electronic filing identity numbers” or EFIN numbers, which allow individuals to file tax returns on behalf of others. Before revoking these EFIN numbers, SIRF fraudsters had used them to file 166,495 fraudulent tax refund claims over the past two years.
“The number of stolen identities and the dollar amount of the tax fraud involved in these cases is staggering,” stated United States Attorney Wifredo A. Ferrer. “These cases serve as a reminder that each and every one of us is a potential victim. While we have a talented and effective team dedicated to fight this fraud, we need everyone – both taxpayers and institutions – to remain vigilant in safeguarding personal identifying information. Protect it as if it were a trade secret.”
U.S. Attorney Ferrer – joined by members of the Strike Force on Thursday – announced the most recent results of their investigative efforts. The cases include:
1. United States v. Rhim-Grant, et al., Case No. 14-20181-Cr-Lenard. United States v. Nydia Tanay Laron Nelson, Case No. 14-2375-mj-Goodman
On March 21, 2014, Pamela Rhim-Grant, 40, and Eugene Moss, 33, both of Miami, were charged by information in a scheme to steal identities for the purpose of conducting stolen identity fraud.
On April 1, 2014, Nydia Tanay Laron Nelson, 30, of Miami, was charged by criminal complaint in connection with the same scheme.
According to the criminal complaint, the defendants conspired to steal the identities of Miami-Dade Public Schools students by exploiting Rhim-Grant’s access to the student information computer database as a food service manager at Horace Mann Middle School. Over the course of more than a year approximately 400 student identities were stolen from across the Miami-Dade County Public Schools district, resulting in numerous fraudulent tax returns.
The information and complaint charge the defendants with conspiracy to commit computer fraud and aggravated identity theft.
Ferrer commended the investigative efforts of the FBI, IRS-CI, and the Miami-Dade Schools Police Department. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
“Criminals all over South Florida are turning to computers to make an easy buck at the public’s expense,” said George L. Piro, Special Agent in Charge, FBI Miami. “Identity theft, the fastest growing crime here, is as easy as one, two, three. One, criminals steal someone’s name and social security number; two, they use that identity to file a fraudulent tax return on line; and three, they collect the refund check. Repeat thousands of times. Don’t become a victim, learn how you can protect your personal identifying information from these thieves at FBI.GOV or FTC.GOV.”
2. United States v. Marlon Maikel Palacios, Case No. 14-20121-Cr-Cooke
On February 28, 2014, Marlon Maikel Palacios, 38, of North Miami, was charged in a twelve count indictment for his participation in a conspiracy to defraud the government and mail theft.
According to the indictment, the defendant, a former mail carrier for the U.S. Postal Service, provided to his co-conspirators addresses on his mail routes used with filing false tax returns with the IRS, receiving IRS correspondence, and tax refund checks. The defendant would then identify and pull the IRS correspondence and refund checks, for which the defendant would be paid. With the IRS correspondence, the defendant’s co-conspirators would file false, fictitious, and fraudulent federal income tax returns and thereafter claim refunds to which they were not entitled from the IRS.
The indictment charges the defendant with conspiracy to defraud the government with respect to federal income tax refunds and theft of mail by a postal employee.
Ferrer commended the investigative efforts of the USPS-OIG, USPIS, ICE-HSI, and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Andy R. Camacho.
“U.S. Postal Service employees are honest, hardworking, and trustworthy, but when a Postal Service employee engages in criminal activity, our Special Agents will investigate those matters vigorously, as we did in this case,” says Max Eamiguel, Special Agent in Charge, U.S. Postal Service, Office of Inspector General.
3. United States v. Rodelyn Lamour and Nestor Armando Herrera, Case No. 14-20169-Cr-Martinez
On March 14, 2014, Rodelyn Lamour, 26, and Nestor Armando Ficquire Herrera, 22, of Miami, were charged in a seven count indictment for their participation in a conspiracy to steal mail and a stolen identity tax refund scheme.
According to the indictment, the defendants used a stolen postal service key to open various apartment complex mailboxes and steal mail containing debit cards. The debit cards contained refunds from fraudulent federal income tax returns filed using stolen identities. The defendants then used the stolen debit cards to obtain cash, without the knowledge or authorization of the identity theft victims. The intended loss to the IRS was approximately $39,000.
The indictment charges the defendants with conspiracy, theft of mail, use of a postal service key, unauthorized use of personal identification information, and aggravated identity theft.
Ferrer commended the investigative efforts of USPIS. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.
Ronald Verrochio, Inspector in Charge for Postal Inspection Service stated, “Tax return fraud directly affects millions of Americans each year and indirectly affects every tax payer throughout the country, we are committed to working with our law enforcement partners to combat this problem.”
4. United States v. Paul Evans Auguste, Case No. 14-80087-Cr-Scola
On February 12, 2014, Paul Evans Auguste, 30, of Miami, was charged in a seven-count indictment for his participation in a stolen identity tax refund scheme.
According to the criminal complaint, Auguste sold approximately 260 stolen identities to an undercover law enforcement officer and stated that he could provide the undercover law enforcement officer any types of identities he would want, including those of children and the elderly. Auguste also stated his intention to conduct tax fraud with the multitude of stolen identities he maintained at his residence. Law enforcement obtained a federal search warrant for Auguste’s residence which revealed an additional 1,200 stolen identities in his possession.
The defendant was charged with access device fraud and aggravated identity theft.
Ferrer commended the investigative efforts of ICE-HSI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
5. United States v. Freddie Howard, Case No. 14-60068-Cr-Rosenbaum
On April 1, 2014, Freddie Howard, 56, of Davie, was charged in a one-count information in a stolen identity refund fraud scheme that involved the submission of approximately $22 million in fraudulent refund claims.
According to the information, Howard operated a tax preparation business called QTS1, Inc. (Quality Tax Service) in Broward County. Howard prepared false and fraudulent tax returns using the identity information of willing participants and stolen identity information. Howard used false and fictitious income and withholding tax information on the returns submitted to the IRS to justify fraudulent large-dollar refund requests. The requested refund amounts generally ranged from $60,000 to $1,400,000, and Howard typically requested payment of these refunds via U.S. Treasury tax refund check. To conceal his identity, Howard submitted the tax returns to the IRS by mail and did not include preparer information. Howard also blocked out the tax preparer software information, and used other people to contact the IRS to inquire about the status of the fraudulent returns.
According to the information, Freddie Howard submitted over $22 million in false and fraudulent tax refund claims to the IRS. The IRS paid approximately $4.5 million on these refund requests.
The defendant was charged with access device fraud and identity theft.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
IRS Special Agent in Charge José A. Gonzalez stated, “Today’s announcement should send a message to those who might consider disguising themselves as legitimate tax return preparers or Electronic Filing Identification Number (EFIN) holders for the purpose of submitting false claims with the IRS. Protecting the integrity of our U.S. tax system is essential, therefore, those who chose to corrupt this system will be investigated and brought to justice, regardless of their level of participation in the fraud.”
6. United States v. Anthony A. Pace, Jr., et al., Case No. 14-20101-Cr-Moore/Torres
On February 18, 2014, Anthony A. Pace, Jr., 29, Brandon A. Terry, 29, Derel L. Henry, 39, and Rosa Johnson, 26, all of Miami, were charged in a twenty-three count indictment for their participation in a $3.3 million stolen identity tax refund scheme.
According to the indictment, the defendants obtained personal identifying information, including names, dates of birth and Social Security numbers, of hundreds of identity theft victims, for use in this identity theft tax fraud scheme. The defendants used this stolen personal identity information, including personal identity information of former and current inmates of the Miami-Dade Corrections and Rehabilitation Program, to file false and fraudulent federal income tax returns without their victims’ knowledge and authorization. Based on Internet Protocal data and a unique tax filing number issued by the IRS called an EFIN, each of the defendants filed false and fraudulent tax returns using stolen identities and directed the IRS to deposit the funds into bank accounts and onto debit cards accessible to the members of the scheme.
According to disclosures at bond hearings, Anthony A. Pace, Jr. was employed as a correctional officer with the Miami-Dade Corrections and Rehabilitation Program. False and fraudulent tax returns were filed in the names of former and current prisoners using an EFIN associated with defendant Pace. These same tax filings directed payment of the illicit tax refund proceeds into accounts controlled by Pace and Johnson. ATM video reveals that Pace was withdrawing funds from the accounts into which the illicit funds were deposited.
The indictment charges all of the defendants with conspiracy to make false claims, in violation of 18 U.S.C. ‘ 286 and aggravated identity theft, in violation of 18 U.S.C. ‘ 1028A, defendants Brandon Terry and Derel Henry with access device fraud, in violation of 18 U.S.C. ‘ 1029, and defendants Anthony Pace and Rosa Johnson with theft of government property, in violation of 18 U.S.C. ‘ 641.
Ferrer commended the investigative efforts of IRS-CI, FBI and USSS. The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.
7. United States v. Judes Stanley Celestin, Case No. 13-60243-Cr-Scola
On September 27, 2013, Judes Stanely Celestin, 36, of Hallandale Beach, was charged in a sixteen-count indictment in a stolen identity refund fraud scheme that resulted in the submission of approximately $1 million in fraudulent refund claims.
According to the indictment, Celestin set up Florida corporations (JC Easy Tax and Taxes on Time) with himself as the president and then opened up bank accounts at numerous different banks from 2010 through 2012 in the name of these corporations. Celestin subsequently caused false and fraudulent tax returns to be filed with the IRS in the names of individuals without these individuals’ knowledge or authority. In total, Celestin caused approximately $1 million dollars in tax refund monies to be direct deposited to these bank accounts and related bank accounts from 2010 through 2012 and then withdrew the money for his own personal use.
The defendant was charged with wire fraud and aggravated identity theft.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
8. United States v. Karl Moltimer, Case No. 14-20117-Cr-Altonaga
On February 27, 2014, Karl Moltimer, 34, of Miami, was charged in a fourteen-count indictment in a stolen identity tax refund fraud scheme that resulted in the submission of over $1 million in fraudulent refund claims.
According to the indictment, Moltimer obtained EFIN numbers that permitted him to file tax returns in the names of other persons. Moltimer opened bank accounts for himself and his business name. Moltimer, through his EFINs, caused false and fraudulent tax returns seeking refunds to be filed with the IRS using stolen individuals’ personal identity information. Moltimer caused the fraudulently obtained tax refunds to be either deposited into bank accounts controlled by him, paid via refund anticipation checks controlled by him, or paid via pre-paid debit cards controlled by him. Moltimer caused over one million dollars in false and fraudulent tax refund claims to be submitted to the IRS from 2009 through 2012 through his EFINs.
The defendant was charged with wire fraud and aggravated identity theft.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
9. United States v. Marlon Hamilton, Case No. 14-20175-Cr-Moreno
On March 18, 2014, Marlon Hamilton, 40, of Hialeah, was charged in a six count indictment for his participation in a stolen identity tax refund scheme.
According to the indictment, the defendant obtained and sold the personal identifying information of numerous identity theft victims, including their names, dates of birth, and social security numbers, to an individual who intended to utilize the information to electronically file false, fictitious, and fraudulent federal income tax returns without the knowledge or authorization of the identity theft victims, and thereafter claim refunds to which they were not entitled from the IRS. The intended loss to the IRS was approximately $190,000. The indictment charges the defendant with unauthorized possession of personal identification information and aggravated identity theft.
Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.
10. United States v. Marcus Braxton, Case No. 14-20174-Cr-Ungaro
On March 18, 2014, Marcus Braxton, 29, of Plantation, was charged in a six count indictment for his participation in a stolen identity tax refund scheme.
According to the indictment, the defendant obtained and sold the personal identifying information of numerous identity theft victims, including their names, dates of birth, and social security numbers, to an individual who intended to utilize the information to electronically file false, fictitious, and fraudulent federal income tax returns without the knowledge or authorization of the identity theft victims, and thereafter claim refunds to which they were not entitled from the IRS. The intended loss to the IRS was approximately $58,500.
The indictment charges the defendant with unauthorized possession of personal identification information and aggravated identity theft.
Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorney Vanessa Snyder.
11. United States v. Richard Anthony Siler, Case No. 14-20116-Cr-Williams
On February 27, 2014, Richard Anthony Siler, 50, of Hollywood, was charged in a nine-count indictment in a stolen identity refund fraud scheme that involved the sale of over 5,000 people’s identities.
According to the indictment and other documents filed in court, Siler discussed selling approximately 10,000 to 15,000 identities to a confidential source who told Siler that the identities would be used to file taxes. Siler indicated to the confidential source that these identities were “never revealed before.” Siler discussed selling the 10,000 to 15,000 identities to the confidential source for approximately $6,200. On February 14, 2014, an FBI controlled e-mail account received an e-mail from Richard Siler containing approximately 5,200 individuals’ personal identifying information that appeared to be patients. On that same date, the confidential source provided Siler with $6,200 in currency and Siler was arrested.
The defendant was charged with access device fraud and identity theft.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to the FBI and IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
12. United States v. Giovanni Francois Noel, Case No. 14-20198-Cr-Moore
On March 28, 2014, Giovanni Francois Noel, 24, of North Miami Beach, was charged in an eight count indictment for his participation in an identity theft tax refund scheme.
According to the indictment, the defendant possessed the social security numbers of at least fifteen individuals. The indictment also alleges that the defendant stole the means of identification, specifically, the name and date of birth, of seven individuals.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to the IRS-CI and the NMBPD. The case is being prosecuted by Assistant U.S. Attorney John R. Byrne.
U.S. Secret Service Special Agent in Charge Paula Reid added, “Once again, the U.S. Secret Service is glad to be an integral part of combatting this massive fraudulent scheme that is plaguing South Florida. Together, we will continue to identify and penalize those who misuse our government systems with no regard to the financial and unjust impacts they cause on others.”
13. United States v. Wallens B. Alcime, Case No. 14-02372-mj-Goodman
On April 1, 2014, Wallens B. Alcime, 26, of Miami, was charged by criminal complaint for his participation in a stolen identity tax refund scheme.
According to the criminal complaint, a confidential source informed law enforcement that Alcime was using the mailing addresses of accomplices to receive stolen identity tax refunds deposited onto pre-paid debit cards. A controlled delivery was arranged where Alcime took possession of a debit card loaded with stolen identity tax refunds while under law enforcement surveillance. Alcime was later captured on surveillance video making cash withdrawals from the debit card.
The defendant was charged with access device fraud and aggravated identity theft.
Ferrer commended the investigative efforts of the FBI and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
14. United States v. Steven Toussaint, et al., Case No. 14-20161-Cr-Martinez
On March 14, 2014, Steven Toussaint, 32, and Emmanuel Alphonse, 28, both of Miami, were charged by indictment in a scheme to launder money from stolen identity tax refund fraud.
According to the indictment, the defendants conspired to conduct financial transactions the purpose of which was to conceal the proceeds of theft from the government. Each defendant is also charged with ten counts of money laundering connected to individual money orders cashed on various dates alleged in the indictment.
The complaint charges the defendants with conspiracy to commit money laundering and money laundering.
Ferrer commended the investigative efforts of USPIS and IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Frank Maderal.
15. United States v. Mark Anthony Dacres, Jr., Case No. 14-20204-Cr-Ungaro
On April 1, 2014, Mark Anthony Dacres, Jr., 30, of Homestead, was charged in a seven-count indictment for identity theft in connection with his unauthorized possession of at least fifteen social security numbers belonging to other individuals. Dacres was found with over 1,700 names, dates of birth and social security numbers of other individuals.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI and USSS. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.
16. United States v. Providencia Llanos, Case No. 14-20205-Cr-Lenard
On April 1, 2014, Providencia Llanos, a/k/a “Providensia Llanos,” a/k/a “Providencia Allison,” 36, of Miami Gardens was charged in a seven-count indictment for identity theft in connection with her unauthorized possession of at least fifteen social security numbers belonging to other individuals. Llanos was found with over 3,000 names, dates of birth and social security numbers of other individuals.
Ferrer commended the investigative efforts of the Strike Force, with special commendation to IRS-CI and USSS. The case is being prosecuted by Assistant U.S. Attorney Gera Peoples.
17. United States v. Stevens Nore, Case No. 14-14016-Cr-Middlebrooks
On March 24, 2014, Stevens Nore, 35, of Port St. Lucie, was charged in a twenty-eight count indictment for his participation in tax fraud and identity theft schemes.
According to the indictment, from June 11, 2009 through April 2012, Nore owned and operated Fraternity Tax and Services, a tax return preparation business located in Fort Pierce. Nore prepared and submitted Individual Tax Returns (Forms 1040), with accompanying schedules, to the IRS on behalf of taxpayers claiming false deductions and credits for tax years 2009 to 2011. Nore also filed false tax returns for 2010 and 2011 by falsely stating the amount of gross receipts and sales on Schedule C forms. The defendant stole three tax refunds totaling $26,349.30 to which he was not entitled, and used the identity of two individuals without their permission.
Nore was charged with twenty-one counts of preparing false tax returns, two counts of filing false tax returns, three counts of theft of public money, and two counts of aggravated identity theft.
Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Shaniek Maynard.
18. United States v. Rony Maurival, Case No. 14-14014-Cr-Middlebrooks
On March 24, 2014, Rony Maurical, 38, of Port St. Lucie, was charged in fifty-two count indictment for his participation in tax fraud and identity theft schemes.
According to the indictment, from July 3, 2008 through March 23, 2012, Maurival owned and operated RJ’s Tax & Services, a tax return preparation business located in Fort Pierce. Maurival prepared and submitted Individual Tax Returns (Forms 1040), with accompanying schedules, to the IRS on behalf of taxpayers claiming false deductions and credits for tax years 2008 to 2011. Maurival also filed false tax returns for 2009 and 2010 by falsely claiming Head of Household and falsely stating Schedule C income, gross receipts, and sales. The defendant stole three tax refunds totaling $3,292 to which he was not entitled, and used the identity of three individuals without their permission.
Maurival was charged with forty-four counts of preparing false tax returns, two counts of filing false tax returns, three counts of theft of public money, and three counts of aggravated identity theft.
Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Russell R. Killinger.
Alysa D. Erichs, Special Agent in Charge for ICE-HSI stated, “Homeland Security Investigations utilizes its vast authorities to work with their partners to disrupt and dismantle criminal organizations involved in tax refund fraud schemes and other financial violations that affect our citizens and economy.”
If convicted, the defendants face a possible maximum statutory sentence of twenty years in prison for each count of wire fraud; ten years in prison for conspiracy to make false claims against the United States; five to fifteen years in prison for access device fraud; ten years in prison for stealing government funds; and two years in prison consecutive to any other term for aggravated identity theft.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
Attention Target shoppers. Expect more, pay less has brought new meaning as an offer of free credit monitoring may not be enough to prevent identity theft, according to Consumer Reports. The offer of “free” credit monitoring may also give shoppers a false sense of security into believing they are totally protected from identity theft.
Following the massive security breach in December that impacted more than 110 million customers, Target offered “peace of mind” to customers worried about identity theft by providing a free credit monitoring service through one of the nation’s largest credit reporting agencies, Experian.
“The problem is that each of the three major credit bureaus — Equifax, TransUnion, and Experian — can collect different information. So unless you’re checking all of them, you can miss someone trying to steal your identity and open new credit,” said Margot Gilman of Consumer Reports.
Target customers can register for the service — provided by Experian, regardless of whether they have been personally affected by the theft of customer data records at the discount store chain.
The credit monitoring service offered by Experian is an ongoing review of your current credit history. If an identity thief opens a new account using your name and personal information, you will receive an alert by email or text message. What the free credit monitoring service through Experian does not do is to monitor transactions — the actual, day-to-day purchases made on your credit and debit cards. That is something you must do yourself.
The Target data breach allegedly involves the use of active account information and not the opening of new accounts.
“So if I understand this correctly, I’m not protected from identity theft at all,” Bina Fink Kohl, herself an identity theft victim and Target shopper, said. “Sounds like another possible scam. Why would I give my information back to the very company that lost it to start with?”
To protect yourself from new accounts being opened without your permission, Gilman suggests placing a security freeze on their credit profile.
“A security freeze is one of the best protections,” Gilman said. “It blocks access to your credit information and makes it more difficult for a crook to open a new account under your name.”
There is a negative side to a total security freeze, though. Any inquiry into your credit history will be totally blocked, meaning an application for credit, goods, benefits, services and/or employment can be delayed or even denied. The credit freeze remains in place until the consumer removes it for a specific purpose or time frame.
More than 110 million shoppers have been impacted by the Target data breach. Each of them has been offered the free credit monitoring service for 12 months. But — according to Consumer Reports — the “free” service is riddled with defects and enticements.
Once consumers enroll in the “free” credit monitoring service, they are enticed with an offer to purchase an Equifax and TransUnion credit report for up to $74 more to supplement the free report provided by Experian. “An Experian ad … pitched me to buy my ‘total credit picture. Why wait? View all three of your credit reports and scores now’ for $14.95.”
The type of free credit monitoring offered by Target monitors only one credit reporting agency — Experian — and not the credit history files maintained by Equifax and TransUnion. This a huge disadvantage, as the data reported from the three major credit bureaus can differ significantly across the country.
The type of free credit monitoring offered by Target is “old school” as it monitors new account activity and inquiries rather than unauthorized charges to existing accounts. These services are already available through most credit and debit card issuers, especially the major banks and financial institutions.
Some of the Experian ads exploit consumers who are ignorant of their rights under federal law. For instance, consumer protection laws already allow identity theft or potential identity theft victims to place a free 90-day fraud alert on their credit report. Placement of the 90-day fraud alert will allow consumers to obtain their credit reports from Equifax, Experian and TransUnion absolutely free.
“I’m alarmed that Target is providing me with a credit monitoring service that may not fully protect my good name and reputation within the community,” said Remington Longstreth, a frequent Target shopper. “When I first learned of the offer, I immediately signed up. Now I’m left wondering if that was the right thing to do.”
In addition to or as an alternative to the Target credit monitoring service offered by Experian, impacted consumers may protect themselves from potential identity theft.
Periodically review your credit report
By keeping close tabs on your credit report at Equifax, Experian and TransUnion credit reporting agencies, you can detect signs of identity theft early. If you find an account not opened by you and have identified it as fraudulent, enter a dispute directly with the creditor as well as with the credit reporting agencies. You may be required to provide them with a valid police report and FTC Affidavit of Identity Theft.
Contact each of the credit reporting agencies and request a 90-day initial fraud alert. Not only will this trigger a free credit report but will advise potential creditors to investigate any application prior to issuing credit or providing services.
Equifax can be contacted at 800-525-6285, Experian at 888-397-3742 and TransUnion at 800-916-8800. Be sure to renew the alert every three months.
Freeze your credit report
Without access to your credit report, identity thieves are frozen in their tracks as creditors will not have access to your credit history. In many states, you are entitled to temporarily “freeze” access to your credit profile without cost if you are over 65 years of age or are a verified victim of identity theft. All others may be required to pay a small fee. Without access to your credit report, no lender will issue credit in your name.
Stop unsolicited credit card or insurance offers
Opting out of pre-screened approval offers for credit or insurance at www.optoutprescreen.com or 888-5OPT-OUT will stop most unsolicited applications and reduce the incidence of identity theft. Opting out refers to the process of removing your name, address and personal identifiers from lists supplied by the Equifax, Experian, TransUnion and Innovis credit reporting agencies to be used for preapproved/prescreened offers of credit or insurance.
“As a single mother, I can hardly afford to lose access to my debit and credit cards let alone become a victim of identity theft,” Target shopper Marina Sweat explained. “I used to shop at Target all the time and although I now shop at Walmart, I’m not any less a target. I’m not happy with the way this whole data breach situation is being handled.”
Seven South Florida residents charged in $49.6 million mortgage fraud scheme
United States Attorney Wifredo A. Ferrer announced Monday the unsealing of a 15-count indictment charging seven South Florida residents in a mortgage fraud scheme that resulted in the approval of approximately $49.6 million in fraudulent loans, according to the Department of Justice.
Ferrer, the U.S. Attorney for the Southern District of Florida, was accompanied at a press conference by Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Fred W. Gibson, Jr., Acting Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDI-OIG).
Among those charged were Domenico “Dom” Rabuffo, 77, of Miami; Mae Rabuffo, 74, of Fort Lauderdale; Diane M. Hayduk, 64, of Miami; Raymond E. Olivier, 52, of Land O’ Lakes; Curtis Allen Davis, 51, of Tampa; Victor Miguel Vidal, 48, of Miami; and Lazaro Jesus Perez, 43, of Miami Lakes.
The alleged scam artists conspired to perpetrate a complex $49.6 million mortgage fraud scheme against various FDIC-insured lenders from 2003 to 2008. Millions in losses to the lenders, including Bank of America, Regions Bank, SunTrust Bank, and Wachovia Bank, resulted from the alleged scam.
The properties referred to in the indictment consist of multiple vacant lots in a community development in North Carolina.
Domenico Rabuffo and Mae Rabuffo allegedly used shell companies to acquire ownership and control of a purported residential property development known as Hampton Springs, located in Cashiers, North Carolina.
According to the indictment, Domenico Rabuffo, Mae Rabuffo, Diane M. Hayduk, Raymond E. Olivier, and Curtis Allen Davis recruited numerous straw buyers to purchase lots in the Hampton Springs development. The straw buyers allegedly financed the purchase of the building lots in Hampton Springs using mortgage loans and further obtained construction loans for the same properties.
Collectively, the defendants caused straw buyers to submit false and fraudulent loan applications and related documents to the lenders to ensure that the straw buyers qualified for the loans. Victor Miguel Vidal served as a loan officer at SunTrust Mortgage, where he shepherded the fraudulent loan applications of the straw buyers through the approval process, including fraudulent applications for $33 million in construction loans.
Lazaro Jesus Perez furnished fictitious and fraudulent accountant’s letters to Vidal in support of various fraudulent mortgage loan applications submitted to SunTrust Mortgage.
Based on the indictment, the lenders were induced to advance approximately $49.6 million in loan proceeds in connection with this scheme. The proceeds of the defendants’ mortgage fraud scheme were funneled through shell-corporation accounts controlled by Domenico Rabuffo and Mae Rabuffo, for the use and benefit of the defendants and their co-conspirators and to further their fraudulent scheme.
The indictment includes charges of conspiracy to commit bank fraud and wire fraud affecting a financial institution and substantive bank fraud offenses. The offenses charged in the indictment each carry a statutory maximum sentence of 30 years in prison, a $1 million fine, and mandatory restitution.
An indictment is only an accusation and the defendants – until proven guilty – are presumed innocent.
__________________
Bill Lewis is principal of William E. Lewis Jr. & Associates, a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity.
Beware of an e-mail claiming to be from the U.S. Department of Homeland Security on behalf of the FBI requesting that you “kindly get back to us for further directives.” It is a scam, according to a report in the Miami Herald on Wednesday.
“It didn’t appear very convincing to me when I opened it,” former WSVN-TV reporter Derek Hayward told Examiner. “An award of almost 11 million dollars would come in quite handy now that I’m retired,” he stated with a chuckle.
The fake e-mail claims as follows:
SECRET SERVICE, DEPARTMENT OF HOMELAND SECURITY
U.S. DEPARTMENT OF HOMELAND SECURITY
WASHINGTON, DC 20528, USA.
Good day,
This is the Department of Homeland Security we have vital mission: to secure the nation from the many threats we face as well as internet Fraud. This requires the dedication of more than 230,000 employees in jobs that range from aviation and border security to emergency response, from cyber security analyst to chemical facility inspector. Our duties are wide-ranging, but our goal is clear — keeping America safe.
We are happy to inform you that your funds valued at US$10,700,000.00 (Ten million Seven Hundred Thousand United States Dollars) have been approved by the Treasury Department of the United States.
Kindly get back to us for further directives.
Note: Do not reply to any e-mail that comes from the FBI Director Robert S. Mueller III. The FBI director does not e-mail people; He will rather send an agent to your door step in person. Do not fall a victim of scam again, a word is enough for the wise.
Thank you and have a good day.
Signed: Julia Pierson
Director, United States Secret Service
U.S. Department of Homeland Security
Washington, DC 20528, USA
The signatory of the e-mail – Julia Pierson – is the real director of the U.S. Secret Service. She is an Orlando native, former Orlando police officer, and spent several years in the Secret Service’s Miami office back in the 1980’s. She became the agency’s first female director in late March.
As in other variations of this scam, this is not a legitimate communication from law enforcement, but rather an attempt to obtain personal banking information from an unsuspecting victim. If you have received this e-mail or something similar to it, do not follow the instructions. It is suggested that you forward the communication to the FBI’s Internet Crime Complaint Center (IC3) at www.IC3.gov.
Florida Attorney General Pam Bondi has filed suit in the Broward County Circuit Court against Hallandale based hurricane shutter company Rolladen, Inc. and its owner, Robert Hoffman, alleging deceptive and unfair trade practices.
Rolladen and Hoffman have marketed and sold hurricane shutters and impact windows to Florida consumers for years. According to the suit, the company allegedly required substantial upfront deposits for shutters or windows and then failed to install them.
According to the Attorney General’s Office investigation that started in March, Rolladen is alleged to have received more than $600,000 in consumer deposits for hurricane shutters or impact windows that it failed to deliver.
“As Floridians safeguard their homes against hurricanes, they deserve the assurance of knowing that they are doing business with fair and honest companies,” said Pam Bondi, Florida’s Attorney General. “My office will continue to investigate deceptive business practices and protect all of Florida’s consumers.”
According to the suit, Rolladen required customers to make an upfront payment of between 40 percent and 80 percent of the contracted price for hurricane shutters. The company then promised delivery and installation within six to 12 weeks of the contract date. In many instances, Rolladen failed to deliver.
Bondi’s lawsuit seeks an order prohibiting Rolladen from the marketing or sale of shutters and windows until installations can be completed in accordance with Florida contractor requirements.
The lawsuit also seeks an immediate freeze of all company assets to maximize refunds for consumers.
In addition to the lawsuit, Hoffman was arrested by the Broward Sheriff’s Office last week on charges of running an organized scheme to defraud and for unlicensed contracting.
In what has been forecast as a busy hurricane season, be sure to conduct your “due diligence” before hiring a hurricane shutter contractor.
Ask who will be doing the actual installation and confirm that the installer is also licensed.
Ask for and check references, and investigate the contractor with the Better Business Bureau (www.bbb.org).
Know what kind of protection you are purchasing. Some counties may have specific standards for storm shutters, so be sure to inquire in advance whether your shutters meet the applicable standards and retain copies of the specifications for insurance purposes.
Know that “hurricane film” is not approved for residential use in Florida.
Florida requires a building permit for installation of shutters and most windows and doors. Be sure your contractor is obtaining a permit for the installation.
Make certain that all materials and supplies, permit fees, and installation costs are included in the price quoted in the written contract.
Ask for a specific installation deadline and request the contractor to include the deadline in the contract.
Beware if the contractor asks for payment in full before the work is completed.
Contractors often require a deposit, but if you pay more than 10 percent of the contract price, the contractor must apply for a permit within 30 days and start work within 90 days of the issuance of the required permit(s).
If you are the victim of Rolladen, Inc. or any other contractor, please contact the Florida Attorney General’s Office at 1-866–9-NO-SCAM (1-866-966-7226) or online at http://www.myfloridalegal.com.
While the Federal Trade Commission has cracked down on debt settlement and loan modification firms that charge upfront fees, little has been done to rein in tax resolution companies that promise to reduce IRS liabilities. The FTC has allowed a number of these operations to continue while making a determination whether the agency has authority over them.
With the April 18th tax deadline a month away, tax relief companies have increased late night advertising and Internet promotions promising to settle delinquent IRS debt for pennies on the dollar. Several of these companies are under investigation for deceptive practices.
Florida Attorney General Pam Bondi’s office has initiated a civil inquiry into Texas based Tax Masters and South Carolina based JK Harris and Company following the receipt of 26 and 92 complaints respectively. These companies solicit clients nationwide promising to reduce anxiety and debt to the IRS.
Tax Masters is being investigated for allegations of unfair competition and deceptive trade. The Texas and Minnesota attorneys general also filed civil charges of deceptive and unfair trade practices against them in 2010.
JK Harris and Company is under investigation for allegedly violating a 2008 settlement with Florida and 17 other states over what regulators said were misleading sales tactics. Among the allegations were false claims that case processors were former IRS agents or tax experts and that the company failed to provide refunds for clients it was unable to help. State officials say JK Harris is cooperating with the investigation.
Some tax relief operations are the target of legal inquiries and lawsuits by regulators in multiple states. Thousands of consumers nationwide have complained they demanded advance fees of up to $25,000, while promising relief from back taxes and penalties, then did nothing.
Tax-relief companies have flourished as the Internal Revenue Service has more aggressively pursued delinquent taxpayers. According to the IRS Data Book, the agency filed nearly 1.1 million liens nationwide in fiscal year 2010, an increase of over 60 percent from 2007.
In a seemingly unregulated industry, tax resolution firms have gone largely unnoticed. A lack of determination of authority from the FTC, tough economic times, and a taxpayers desire to reduce anxiety and IRS debt, have allowed them to exist. Good common sense in choosing a credentialed tax expert and paying huge upfront fees has been ignored.
According to the Internal Revenue Service, three professionals are authorized to represent taxpayers before them – attorneys, certified public accountants and enrolled agents, all whom must pass an IRS test and take refresher courses.
In the absence of representation, consumers can negotiate back taxes and penalties directly with the Internal Revenue Service.
Following the 2008 settlement, JK Harris changed its business model and claims to charge only in advance for a report that analyzes what program a taxpayer would be qualified to participate. Taxpayers could then use the report to negotiate directly with the IRS or retain JK Harris to represent them.
Tax Masters said the company adopted a similar model last year and is charging fewer upfront fees. Following an analysis, clients can decide if they want Tax Masters to pursue a resolution and will be charged only if the company is successful. The average Tax Masters client pays $4,500.
Regulators and consumer advocates warn against using companies guaranteeing what the Internal Revenue Service calls an “offer in compromise” — a settlement for reduced tax payment. Although increasing, IRS statistics show that only 25 percent of compromise applications are granted.
Taxpayers seeking relief from IRS debt should also be aware that companies claiming to be tax specialists may simply be advertising the services of a third-party.
Unlike the debt settlement and loan modification industry, tax resolution services are unregulated in Florida. Despite the huge volume of complaints regarding advance payments and deceptive advertisements, lawmakers have taken little notice. No regulation seems on the agenda of the 2011 Florida legislature.
To file a complaint with the Federal Trade Commission, visit www.ftc.gov or call (877) FTC-HELP (877-382-4357).
To file a complaint with the Attorney General’s Office, visit www.myfloridalegal.com or call (866) 9-NO-SCAM (866-966-7226).
William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into The Credit Report with Bill Lewis, weekdays at 9 o’clock on AM 1470 WWNN.
The Federal Trade Commission (FTC) adopted strict new rules on Thursday that ban debt settlement companies from charging advance fees for elimination of credit card balances and other consumer debt. Effective October 27th, for-profit companies that sell debt relief services by telephone will no longer be allowed to charge a fee before they successfully settle or reduce a consumer’s outstanding debt obligation.
“This rule will stop companies who offer consumers false promises of reducing credit card debts by half or more in exchange for large, upfront fees,” FTC Chairman Jon Leibowitz,, said Thursday, accompanied by Vice President Joe Biden. “Too many of these companies pick the last dollar out of consumers’ pockets – and far from leaving them better off, push them deeper into debt, even bankruptcy.”
The rule concerning upfront fees covers for-profit debt relief telemarketers, including credit counseling, debt settlement and debt negotiation services. It does not cover Internet sales or nonprofit firms, but does cover companies that falsely claim nonprofit status.
Scheduled to take effect on September 27th are three additional Telemarketing Sales Rule (TSR) provisions that will require debt settlement companies to make specific disclosures to consumers; prohibit them from making material misrepresentations; and extending the TSR to cover calls consumers make to these firms in response to debt relief advertising.
Since the start of the recession, consumers from all 50 states have filed complaints with the Federal Trade Commission and the Better Business Bureau (BBB) about debt settlement companies. In addition to the BBB, angry customers have taken their complaints to their state Attorney General. The FTC and state enforcers have brought a combined 259 cases in the past decade to stop deceptive and abusive practices by debt relief providers that have targeted consumers in financial distress.
Attorneys General from Florida, Maine, Texas , Idaho, Missouri, New York, Illinois, West Virginia, Vermont and Minnesota have taken action against companies such as Debt Settlement America, Debt Rx USA, Financial Freedom of America, Clear Your Debt, Swift Rock Financial Solutions and Credit Solutions, a company that has received over 1,600 complaints in the past 36 months.
“My office works to protect Floridian’s from misleading debt relief activities by seeking to stop deceptive practices and resolving consumer complaints,” stated Attorney General Bill McCollum. “In these tough economic times, a consumer’s best defense is to be aware of misleading advertisements and avoid sending money to companies offering such services.”
The rule further specifies that fees for debt settlement services may not be collected until a debt has been successfully renegotiated, settled, reduced or the contract terms have been changed. Moreover, there must be a written settlement agreement, debt management plan or other agreement between the consumer and the creditor and the consumer must have made at least one payment as a result of the agreement negotiated by the debt relief provider.
If a consumer has enrolled multiple debts in one debt relief program, the rule specifies how debt relief providers can collect their fee for each settled debt. To ensure providers do not front-load their fees, the fee for a single debt must be in proportion to the total fee that would be charged if all of the debts had been settled. Alternatively, if the fee is based upon a percentage of what the consumer saves, the percentage charged must be the same for each of the debts.
The rule further specifies that consumer’s may maintain fees and savings for creditor payment in a “dedicated account.” However, providers may only require a dedicated account under the following five conditions: the dedicated account is maintained at an insured financial institution; the consumer owns the funds (including any interest accrued); the consumer can withdraw the funds at any time without penalty; the provider does not own or control or have any affiliation with the company administering the account; and the provider does not exchange any referral fees with the company administering the account.
If you have been victimized by a debt relief program, file a complaint with the Attorney General’s Office by calling (866) 9-NO-SCAM (866-966-7226) or visiting their website at http://www.myfloridalegal.com. The Federal Trade Commission also offers a variety of resources detailing consumer rights at http://www.ftc.gov.
William E. Lewis Jr. - Bill Lewis - Vero Beach, Florida 