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Three Debt Relief Companies Have Been Fined and Shut Down for Defrauding Customers


On January 24th, 2017, the Federal Trade Commission (FTC) and the Florida Office of the Attorney General announced against sanctions against three debt relief companies. The companies, Consumers Assistance, LLC, Consumer Assistance Project, Corp, and Palermo Global, LLC, were fined a total in excess of  $2.3 million. All three companies have also been permanently banned from operating within the state of Florida. These penalties were issued because the companies violated several federal and state consumer protection regulations, including the Florida Deceptive and Unfair Trade Practices Act.

Understanding the Debt Relief Fraud Scheme

The three debt relief firms involved in this case focused their business practices on targeting consumers with high levels of student loan debt. According to the Florida Attorney General, the companies, through their advertising, told consumers that they could help them dramatically reduce, or even eliminate, their student loan obligations. Additionally, the debt relief firms also marketed these consumer credit repairs products, making claims that good credit could be restored in a rapid manner. In reality, the companies had little ability to deliver on the promises that they were making. In order to help push their services, sales representatives at the companies were instructed to refer consumers to online reviews of the company’s services. While the reviews were presented as “unbiased” and “volunteered from former clients”, these reviews were actually almost entirely fake. To make matters worse, these three companies were also illegally charging financially distressed borrowers upfront fees for their debt relief services.

The Elements of Consumer Fraud

The student loan debt relief services offered by these companies is a classic example of fraud. Under Florida law, consumer fraud is any type of deceptive practice that causes a consumer to suffer losses in the course of a purportedly legitimate business transaction. As this definition is broad, consumer fraud can occur in many different ways. That being said, consumer fraud schemes all share one important characteristic: The consumer is being promised a good or service that the seller knows that it cannot deliver. Bad acting parties must be held accountable for their fraud. To hold another party liable for fraud in Florida, you will need to prove each of the following four legal elements:

  • A misrepresentation was made;
  • That misrepresentation was made with the knowledge that it was false;
  • The false representation was made with intent to induce action; and
  • The victim who relied on the misrepresentation sustained real damages.

Victims of consumer fraud are legally entitled to recover compensation for the full extent of their economic losses. Of course, in the real world, actually recovering those damages can be extremely challenging. It is imperative that consumer fraud victims work with a qualified attorney who has the skills and experience necessary to handle their claim.

Contact Our Office Today

If you believe you were the victim of consumer fraud, please contact the experienced legal team at Pike & Lustig, LLP today. Our consumer fraud lawyers will review your case for free and we determine exactly what needs to be done to help you to recover compensation. We serve fraud victims throughout Southern Florida, including in Miami, Homestead, Fort Lauderdale and Palm Beach Gardens.




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