The United States Department of Justice (DOJ) Consumer Protection Branch frequently announces news and alerts to warn consumers of fraudulent business operations. Investigations and prosecutions of wrongdoers can involve federal, state and local agencies working together to share information and bring individuals to justice. In consumer fraud cases there may be criminal and civil penalties and fines imposed on organizations and their owners who make false promises to consumers and take their money, often without providing any services, or certainly not what was offered to the consumer. Certain consumers are specifically targeted based on their age, race, and income bracket. When something seems too good to be true, it may be. Spotting and reporting consumer fraud is an important first step in stopping scammers and preventing others from trying defraud consumers.
Scammers masquerading as debt relief companies are common, and this one falsely claimed to be a law firms and companies run by lawyers.
A California man recently pleaded guilty to allegations of conspiracy to commit mail and wire fraud in the operation of companies, Nelson Gamble & Associates and Jackson Hunter Morris & Knight LLP. The DOJ press release reports that, “Nelson and his employees portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments expecting the money to go toward settlements. Nelson and his co-conspirators instead took at least 15 percent of the total debt as company fees, within the first six months of payments going almost entirely toward undisclosed up-front fees.[i]”
The DOJ and the U.S. Postal Inspection Service[ii] (USPIS) spokespersons commented on their efforts to protect consumers against fraud schemes: “This scheme victimized people already in financial distress…the Justice Department is committed to protecting consumers, particularly those who are vulnerable to fraud schemes designed to prey upon people already in perilous economic conditions,” stated U.S. Attorney Eileen M. Decker; “The U.S. Postal Inspection Service will continue to vigorously pursue those who use our nation’s mail system to commit fraud or other illegal activity,” said Acting Inspector in Charge Daniel Brubaker.[iii]
The Federal Trade Commission (FTC) filed its civil case against Nelson and his companies in September 2012 and the case was settled by agreement in August 2013. Information obtained in investigations showed Nelson operated his scheme from February 2010 through September 2012, for which he faces a potential 20-year prison sentence.[iv] While the DOJ and FTC news releases do not mention any privately filed civil complaints against Nelson, there may be several consumer protection laws he and his group violated, for which the individuals filing private lawsuits can collect actual damages, statutory damages and private attorney’s fees.
Make note of common telemarketing and sales pitches with amazing claims.
In its consumer protection news report, the FTC discussed how Nelson and his group robo-called phone numbers listed on the National Do Not Call Registry in attempting to sell their debt relief services. The FTC complaint cites language in a website operated by Nelson, “Nelson Gamble works with the utmost diligence to obtain the best possible outcome for our clients, with over $90 million of debt settled in the past 12 months – and over $800 million since our inception,” using “proven tactical methods to settle debt by 50% to 80%…in three years or less.[v]” Nelson and his cohorts likely assumed that most of the consumers they were targeting would have access or ideas on how to research the claims made by these companies.
Make the call to report potential crimes and consumer protection violations to stop the scammers.
If you receive an offer from a company that sounds too good to be true, do some research. If a debt relief company is able to knock out 50 to 80 percent of your debt, are all bankruptcy lawyers going out of business? If you believe you are communicating with a potentially fraudulent company trying to swindle you, tell someone. The next person they call could be your elderly mother or another family member, friend or neighbor; there is no telling who is on the robo-call list.
The Zamparo Law Group receives phone calls and emails from consumers who believe their rights and the laws were violated by telemarketers and debt-relief-type companies that make claims that sound too good to be true. The attorneys at the Zamparo Law Group can tell you whether you have a legal right of action and whether higher federal, state or local authorities and agencies may be appropriate to contact. If you have a case, the Zamparo Law Group can get to work advocating for your consumer rights.
The Zamparo Law Group, P.C. is a consumer protection law and litigation firm, representing consumer plaintiffs. Zamparo Law Group in the northwest suburbs of Chicago sues and wins against the companies who refuse to follow the law.
To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook, Twitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.
[i] U.S. Department of Justice, Office of Public Affairs, California Man Operating Phone Room in Debt Relief Scam Pleads Guilty to Defrauding Consumers, Release Date Feb. 1, 2016.
[ii] The U.S. Postal Inspection Service investigates the use of the mail system to commit fraud or other illegal activities (the U.S. mail was used in connection with this fraud).
[iii] See DOJ press release, HNi above.
[v] See HNiv above.