In a recent enforcement action highlighting its ongoing scrutiny of deceptive debt relief schemes, the Federal Trade Commission (“FTC”) has shut down an operation accused of falsely representing affiliations with government entities and reputable financial institutions. The FTC obtained a temporary restraining order, asset freeze, and appointment of a receiver, signaling its willingness to aggressively intervene when consumer financial harm is evident.
In this case the alleged that consumers were persuaded to cease payments to legitimate creditors and instead direct funds toward upfront fees practices that clearly violate the Telemarketing Sales Rule (“TSR”). The FTC argued that these deceptive claims and prohibited fee structures inflicted significant financial harm on consumers already facing substantial debt burdens, often without delivering the promised debt relief. Also among the FTC’s allegations were that defendants unlawfully obtained consumer credit reports without a permissible purpose under the Fair Credit Reporting Act (“FCRA”).
This case underscores the Federal Trade Commission’s willingness to aggressively enforce consumer protection laws, including but not limited to the TSR, particularly as the Consumer Financial Protection Bureau has taken on a diminished enforcement role under the current administration. Read the FTC’s July 21, 2025 announcement in full and find a link to the Complaint here.
