A debt relief company and its principals who allegedly misled consumers and charged illegal advance fees will be banned from those practices under a settlement with the Federal Trade Commission.
According to the FTC’s complaint, United Debt Counselors LLC exaggerated how much money people would save using its services. The company’s direct mail ads, which reached up to 100,000 consumers per week, looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months.
The defendants allegedly repeated similar claims on their website and by phone when consumers called in response to the mail. They claimed a high success rate and asserted that consumers rarely dropped out of their program. The defendants also claimed they provided consumers with a special savings account that only consumers could control, but according to the FTC, the defendants removed monthly fees from the accounts.