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FTC Charges Marketers of ‘Debt Meltdown Program’
with Allegedly Failing to Deliver Promised Debt
Reduction Services
The Federal Trade Commission charged four companies
and their principals, Miriam and Robert Lovinger,
with deceptively marketing a “debt settlement” operation
that allegedly failed to provide services it claimed
would reduce consumers’ debt, resulting in even more
debt for many consumers. The FTC has requested an
expedited hearing for a temporary restraining order.
According to the FTC’s complaint, since at least 2000
the defendants have sold debt settlement services
through the Web sites idebthelp.com, moneycares.com,
edgesolutions.com, and ontrackmpower.com, offering
a “Debt Meltdown Program” they describe as “an aggressive
method of helping consumers out of the debt trap and
away from the bankruptcy path.” They claim they will
negotiate with creditors to enable consumers “to escape
debt at a fraction of the total amount they owe,”
that consumers end up repaying only “60 cents for
every dollar that is owed,” and that “we can reduce
your unsecured debt by up to 60 percent and sometimes
more and have you debt free in 18 to 30 months.”
The complaint alleges that consumers who call the
defendants’ toll-free number are told that the defendants
will obtain settlements that will substantially reduce
their debt. The defendants allegedly promise to negotiate
with creditors and begin making payments to them within
several weeks after consumers join their program,
and to provide personalized financial counseling.
As noted in the complaint, consumers allegedly are
told to set up a direct debit from their checking
account for deposit into a bank account established
by the defendants, who will debit their fees and pay
creditors. They also are told to have no further contact
with their creditors, and to stop paying them immediately,
enabling the defendants to negotiate for them.
For the rest of this article please feel free to visit
www.ftc.gov.
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