News Release - McCollum: Florida Joins FTC, Other States in Effort Targeting Economic-Based Scams

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Attorney General Bill McCollum News Release

July 1, 2009

en Español

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Media Contact: Sandi Copes
Phone: (850) 245-0150

McCollum: Florida Joins FTC, Other States in Effort Targeting Economic-Based Scams

~ Operation focuses on “business opportunity fraud,” debt relief scams ~

TALLAHASSEE, FL – Attorney General Bill McCollum today joined with the Federal Trade Commission (FTC) and other state authorities to announce a coordinated effort targeting scammers capitalizing on the current economic climate. The operation focused on a variety of schemes including bogus employment opportunities, fraudulent business ventures, falsified government grants and phony debt reduction services, as well as the placement of unauthorized charges on consumers’ credit or debit cards.

“As our state and our citizens face tough economic times, some individuals are taking advantage of the situation by preying on the vulnerability of others, making circumstances more difficult,” said Attorney General McCollum. “This operation will help create a necessary deterrent so these unscrupulous people stay out of our state.”

Florida’s actions included a settlement with MagicJack resolving allegations the company marketed a “free” 30-day trial for its long distance phone equipment, but actually charged and debited consumers during the trial. Other settlements with debt relief organizations were also part of the sweep including Family Credit Counseling Corp., of Ft. Lauderdale, that allegedly misappropriated debt management funds, and Financial Freedom Resources, a Clearwater-based company that telemarketed alleged debt reduction services.

The law enforcement sweep, dubbed Operation Short Change, included enforcement actions by 14 states and the District of Columbia, as well as 15 FTC cases and 42 law enforcement actions by the U.S. Department of Justice. The FTC cases included eight new law enforcement actions against companies that have conned consumers struggling to make a living and pay their bills during these difficult economic times. The defendants in these cases were charged with making deceptive or unfair claims and, in some cases, with making illegal transfers of electronic funds or violating the Telemarketing Sales Rule.

In addition to Florida, states participating in the sweep were California, Illinois, Iowa, Kentucky, Louisiana, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, Texas and Wisconsin as well as the District of Columbia.

The FTC also produced a new consumer education video featuring consumer victims and a former scammer who gives an insider account of how these operations use high-pressure tactics and celebrity endorsers to trick cash-strapped consumers. More information is available online at: http://www.ftc.gov/opa/2009/07/shortchange.shtm.