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Debt Reduction Companies Settle with FTC

Two debt reduction companies and their principals have agreed to settle Federal Trade Commission charges alleging that they violated federal law by falsely claiming that they could reduce consumers’ credit card interest rates or the amount of their credit card debt. Terms of the settlements, in which the defendants have not admitted liability, are defined in stipulated orders entered by the United States District Court for the District of Colorado on January 31, 2008.
According to a complaint filed by the FTC in March 2007, the defendants sold debt reduction services through Web sites and television and radio advertisements with claims such as “Reduce Debt Now” and “Eliminate Harassing Calls.” When consumers called a toll-free number, the complaint alleged, they were encouraged to enroll in a “debt consolidation program” if their unsecured consumer debt was up to one month overdue, or a “debt settlement program” if overdue longer.
From the ftc website.

The FTC alleged that the defendants violated the FTC Act by falsely promising to obtain lump-sum settlements, such as “fifty cents on the dollar” or “50 to 60 percent” of consumers’ total unsecured debt, or to negotiate with creditors for lower interest rates. The complaint also alleged that they misrepresented that they would not charge consumers any up-front fees before obtaining the promised debt relief, and that participation in their program would stop creditors from calling or suing them to collect debt.

The settlement orders prohibit the defendants from engaging in the violations alleged in the complaint, and require them, when making representations about specific debt reductions they can achieve, to disclose truthfully key terms of the program: all fees and costs they charge, including when and how such fees and costs will be paid by consumers; the approximate time period before settlements will be achieved; and the fact that consumers’ balances typically will increase before settlements for all accounts are achieved. The defendants also agreed to standard compliance and reporting provisions that enable the FTC to monitor future compliance with the orders.
Copies of the orders are available from the FTC’s Web site at

Cell Phones and the National Do Not Call Registry

In response to recent e-mail campaigns urging consumers to place their cell phone numbers on the National Do Not Call Registry, the Federal Trade Commission and Federal Communications Commission issue this advisory to give consumers the facts.

Here’s what you need to know about the National Do Not Call Registry program:

* FCC regulations prohibit telemarketers from using automated dialers to call cell phone numbers. Automated dialers are standard in the industry, so most telemarketers are barred from calling consumers on their cell phones without their consent.

* The federal government does not maintain a national cell phone registry. Personal cell phone users have always been able to add their numbers to the National Do Not Call Registry — the same Registry consumers use to register their land lines — either online at or by calling toll-free 1-888-382-1222 from the telephone number they wish to register. Registrations become effective within 31 days of signing up and are active for five years. There is no cut-off date or deadline for registrations.

* Business-to-business calls are not covered under the Registry.

For More Information

To learn more about the National Do Not Call Registry and the rules that enforce it, visit the FTC at or the FCC at For more information about a planned “wireless 411” directory, visit

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