Federal Trade Commission banned three debt relief companies from business for the false statements about their service that can help people get out of credit card debts and stop irritating calls and notices from debt collection agency. Besides, the defendants, Jonathan Greenberg, Financial Future Network LLC, Hermosa Group LLC, Media Innovations LLC, also get the fine of $500,000 for settling the changes.

Due to the complaint performed by FTC, the defendants provided phony commercials of their debt relief service via television and radio, making business as Financial Future Network and Hermosa Group. They claimed about their possibility to help people reduce credit card debt by means of advertisements which were broadcast in either English or Spanish, though, these promises were absolutely deceptive.

In fact, the defendants didn't perform any debt reduction services. According to FTC, the aim of this advertisement campaign was to attract consumers by this affordable option and get a lot of calls to their toll-free number. Then, the personal data of consumers were sold to debt relief providers. The defendants also failed to get proper evidence from those providers who bought their sales leads that they were able to reach the advertised results.

Well, Greenburg, Media Innovations LLC, Hermosa Group LLC and Financial Future Network LLC got the fine of $8.5 million according to the FTC settlement and the amount will be suspended when they provide the payment of $500,000. Besides, if it turns out that Greenburg performed false information about his financial state, the entire penalty will be due instantly.

In spite of the fact that the defendants were banned from the business, they are also prohibited from providing false claims about related financial options and from representing unsubstantiated material facts concerning any service or product. Besides, according to the FTC statement it's forbidden for them to disclose or benefit from any personal data performed by consumers.

Due to such case, federal Trade Commission has amended the Telemarketing Sales Rule that now requires debt settlement companies to provide particular disclosures and prohibits from performing phony claims and ads. Moreover, it's also forbidden to collect fees before the actual help is fulfilled. The FTC hasn't pursued any violations of the newly created instructions as the defendants' advertisements predated these changes.

Actually, it is really easy to be cheated today using various financial services as there are a number of companies claiming about their great options and products. Thus, be careful and don't trust anyone before checking their reputation and history.

Author's Bio: 

David Gorgon works as a financial consultant and deal with various financial options concerning cash advance and debt consolidation and he wants to share his experience and some latest news.