On Wednesday, the Federal Trade Commission (“FTC”) announced a pair of enforcement actions and asset freezes relating to alleged violations of the Telemarketing Sales Rule (“TSR”).
In the first action, the FTC alleged violations of the FTC Act and TSR by American Precious Metals and its principals. The FTC alleged that the company “tricked” consumers into buying high-fee, high-risk investments on credit by misrepresenting or not disclosing material information such as the risk of the investment, total fees, interest on credit purchases, and the possibility those consumers may face margin calls.
In the other action, the FTC alleged that Premier Nationwide Corporation and its principal violated the FTC Act and the TSR by offering, for an upfront fee, to consolidate consumers’ debts on a low-interest credit card or help lower the rate consumers were currently paying on an existing account. The company also offered a money-back guarantee, minus a 20 percent processing fee. In reality, the FTC alleged in its complaint, Premier Nationwide did little to help consumers who paid its fee, often caused those consumers to incur additional fees, and frequently refused to issue refunds when they were requested.
Under changes made to the TSR in 2010, companies who market debt relief services over the telephone are prohibited from charging a fee until they have achieved the promised result.
Go here to read the FTC’s press release and complaint in the American Precious Metals case.
Go here to read the FTC’s press release and complaint in the Premier Nationwide case.