The Federal Trade Commission (FTC) and the Florida Attorney General (AG) have jointly filed a complaint in a Florida federal court against several companies and their individual owners alleging that the defendants engaged in a debt relief telemarketing scam.

The complaint alleges violations of the FTC Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, and the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). In support of their accompanying request for a temporary restraining order, asset freeze, and appointment of a receiver, the FTC and Florida AG also charged that the defendants’ alleged conduct was “particularly egregious” because it systematically targeted elderly consumers.

The FTC and AG’s request for relief was granted, with the court’s order also directing the defendants to show cause why a preliminary injunction should not be issued. In the complaint, the FTC and AG seek permanent injunctive relief, consumer redress (such as rescission or reformation of contracts, restitution, refunds, and disgorgement), and civil penalties under the FDUTPA.

According to the complaint, the defendants’ unlawful actions included the following:

• Falsely representing that the purchase of defendants’ credit card rate reduction services would result in substantial interest rate reductions, thousands of dollars in savings, and faster repayment of debts
• Falsely representing an affiliation with credit card issuers
• Making unauthorized charges to consumers’ credit cards for fees
• Making calls to consumers whose telephone numbers were listed on the National Do Not Call Registry and failing to honor do not call requests

As we have previously reported, a growing number of states require financial institutions and others to have procedures in place to detect, block, and ultimately report these types of alleged scams. In addition, many banking agencies, regulators, and attorneys general are expecting financial institutions and others, especially entities that regularly interact with the elderly, to have robust elder abuse prevention policies and procedures in place. While the alleged facts are extreme in this case, the risk of committing elder financial abuse exists among practically all banks and nonbanks in the consumer financial services space.