FTC sues credit-fixing firm in fraud case

By Jennifer C. Kerr
Associated Press

•	To file a complaint The Federal Trade Commission takes complaints about deceptive or unfair business practices. Call toll-free, (877) 382-4357, or use the complaint form at www.ftc.gov.

A lawsuit by the Federal Trade Commission accuses the National Consumer Council of deceptive claims and practices that harmed thousands of people.

The agency said the council wrongly billed itself as a nonprofit and scammed people when they enrolled in debt-settlement programs in which the company was supposed to negotiate a one-time fee the customers would pay to creditors.

Instead, the FTC said, the council charged hundreds of dollars in hidden fees and delayed payments to creditors for six months or longer. Consumer racked up late payments, interest fees and other charges, digging themselves further into debt. Many were forced into bankruptcy, the FTC said.

A spokeswoman for the Santa Ana-based company denied the fraud charges.

"NCC has not collected any money from any consumers. It is a nonprofit organization that helps consumers and guides them in regards to credit card debt," said council spokeswoman Nilou Salimpour.

The FTC also charged the council with violating the government's "do not call" registry. The agency said it logged more than 1,000 complaints from consumers who placed their phone numbers on the list but still received calls from telemarketers for the council.

"These defendants lied about their nonprofit status and intentionally put consumers in harm's way financially," Howard Beales, director of the FTC's Bureau of Consumer Protection, said at a news conference. "NCC was calling people they shouldn't have been calling, and claiming things they shouldn't have been claiming."

This marks the first enforcement action taken by the FTC because of an alleged violation of the popular registry set up last fall to block many unwanted telemarketing calls.

The agency is seeking millions of dollars in damages on behalf of NCC's customers.

At the FTC's request, a judge has appointed a receiver to take over the council's business.

Almost two dozen companies and individuals were named in the lawsuit, including the council's president, Harvey Warren, and four affiliated companies: London Financial Group; National Consumer Council, a Nevada corporation; National Consumer Debt Council; and Solidium.