Below are highlights from some of our civil and criminal achievements for consumers in 2013.
Credit Repair and Debt Adjustment
- The debt adjustment company EC Lending, LCC, which does business as Hardship Assistance Center, and its principal Neil Billock, sent mail solicitations to Georgia consumers advertising benefits available to them in the form of 2010 stimulus funds. Consumers calling the toll-free number on the mailer were put in touch with representatives who pitched debt adjustment services and advised the consumers that there were no stimulus funds available to help them pay off their debt. The company entered into an Assurance of Voluntary Compliance with the Governor’s Office of Consumer Protection (“OCP”) agreeing to comply with the Georgia Debt Adjustment Act and the Telemarketing Sales Rule, to cease from making misrepresentations to consumers, and to pay $18,113 to consumers as restitution, a $12,500 civil penalty, and $10,000 in administrative expenses.
- CallCreditRx, LLC is a credit repair company operating out of Sugar Land, Texas. The company unlawfully provided credit repair services to Georgia consumers in violation of the Fair Business Practices Act. The company signed an Assurance of Voluntary Compliance requiring it to pay $10,304.50 in consumer restitution and a $20,000 civil penalty.
- Consumer Credit Advocacy, Inc. and Jean S. Taffel, Individually, sold credit repair-related services to consumers, but did not operate within any of the exceptions that would legally permit them to do so in Georgia. They also misrepresented to consumers that they could help improve their credit rating and/or help them get an extension of credit. The company signed an Assurance of Voluntary Compliance requiring it to cease conducting all credit repair-related business in the State of Georgia immediately. In addition, the company paid a civil penalty of $5,000, administrative costs of $5,000 and consumer restitution.
Debt Collection Practices
- OCP initiated an investigation into the practices of the Georgia-based debt collections company Mauconduit & Luna, LLC and Ineabelle Buitrago, Individually, after receiving numerous consumer complaints alleging that company representatives were threatening and harassing consumers; leaving messages that implied a connection with a law firm; divulging information to third parties about the debtor's account; failing to verify the debts; and continuing to contact consumers after they had been asked to stop. The company signed an Assurance of Voluntary Compliance requiring it to shut down operations and forgive over $11.9 million in consumer debt for the accounts in its portfolio. In addition the company agreed to pay approximately $5,000 for investigative/legal expenses and a civil penalty of $195,000.
Deceptive Auto Sales and Advertising
- NAVISS, LLC, which is based in St. Louis, MO, sells vehicle service contracts to consumers throughout the country. OCP verified that NAVISS sent mail solicitations to Georgia consumers which contained multiple violations of the Fair Business Practices Act, including: misrepresenting that the service contracts it offered would continue coverage and extend consumers' existing warranty coverage; implying that NAVISS was affiliated with consumers' vehicle manufacturers, when such was not the case; making misrepresentations to create a false sense of urgency; and representing that consumers' coverage was expiring or had expired when these statements could not be substantiated. The company sales force also failed to disclose to consumers the terms of the company's refund policies. NAVISS signed an Assurance of Voluntary Compliance in which it agreed to refrain from making these misrepresentations in future promotional materials, to pay $50,000 in penalties and expenses, and $25,000 in cy pres restitution to the Georgia Governor's Office of Workforce Development's Go Build Georgia Educational Foundation for use in auto repair programs.
- An OCP investigation revealed that the dealership Golden Isles Nissan, Inc. and Frances Roberson, Individually, routinely accepted trade-in vehicles with unpaid liens, but failed to pay off many of those loans, leaving consumers liable for payments on two vehicles. In response to the investigation, owner Roberson immediately began paying off all unpaid liens and agreed in the Assurance of Voluntary Compliance to promptly satisfy all loans. In addition, the company paid a $10,000 civil penalty and $10,000 in administrative fees.
- U.S. Auto Sales, Inc. advertised numerous motor vehicles as new when they were actually used and when the dealer no longer had a valid franchise agreement with the manufacturer. The dealership also failed to remove sold vehicles from its online inventory in a timely manner. In settlement of this matter, the company agreed to numerous compliance provisions regarding its advertising practices and paid $6,000 in civil penalties and $1,500 in restitution.
- Consumers complained that Sons Auto Holdings, LLC doing business as ("d/b/a”) Sons Honda, excluded dealer fees from its advertised vehicle prices. The company made the required advertising changes and paid $1,198 in consumer restitution and a $5,000 civil penalty.
- Auto dealership SLNH, Inc. d/b/a Marietta Auto Mall was charging consumers dealer fees on top of advertised vehicle prices in direct violation of a 2010 settlement. In response to the investigation and prior to reaching a settlement with OCP, owner Shahid Latif provided restitution to seven consumers who had complained to OCP. The dealership signed an Assurance of Voluntary Compliance requiring it to pay a $20,000 civil penalty, $15,000 in administrative fees and $3,493 in consumer restitution.
- OCP began investigating Second Chance Motors of Marietta, LLC after receiving complaints from consumers who had purchased vehicles from the dealership but had not received a title for their vehicle. Our investigation revealed that the dealership failed to submit completed title applications to the appropriate authority, sometimes more than six months after vehicles were purchased. OCP also determined that the dealership repossessed or attempted to repossess certain consumers' vehicles despite not making itself available to receive payments from these consumers. Under the terms of the Assurance of Voluntary Compliance, the company agreed to refrain from these practices, and to pay $19,429 in consumer restitution, $6,250 in penalties and $6,250 as administrative expenses. An additional $12,500 civil penalty will be assessed if the dealership repeats any of the violative behavior within the next year.
- Ivory Chevrolet engaged in several deceptive practices, including advertising vehicle prices which excluded the dealer's "doc" fee, violating the Truth-in-Lending disclosure requirements, and conditioning offers on consumer credit scores. The dealership made appropriate advertising changes and agreed to pay a $3,000 civil penalty and $2,000 for administrative expenses.
Disposition of Business Records Containing Personal Information
- OCP received information that Greene Finance Company, Inc. was failing to properly dispose of business records containing consumers’ personal identifying information. OCP verified that the company was throwing away business documents containing consumers’ and employees’ Social Security numbers, copies of their driver’s license cards, tax and loan information and other personally identifying information without first shredding, erasing or modifying the information, as the law requires. The company was required to properly destroy the business records found during this investigation and provide OCP with a dated receipt from a document shredding company. The settlement also required Greene Finance to implement policies and procedures to ensure the company's compliance with the Business Administration Act and to pay a civil penalty of $10,000.
- Atlanta Solution Locksmiths, LLC, whose sole location is in Atlanta, Georgia, made numerous misrepresentations as to the number and locations of its offices via its web sites and yellow page advertisements. Our investigation revealed that the company had 155 different websites, 140 of which had geographic designations in the website name, such as conyerslocksmithservice.com, locksmithinmariettaga.com, and cartersvillelockandkey.com. The many different phone numbers it published were all forwarded to the Atlanta office. The company advertised a response time of 15 minutes, yet consumers frequently had to wait much longer for a technician to show up. When consumers called they were quoted a price for the services to be performed. The price was typically much lower than what most of the company’s competitors were charging. However, after the technician arrived and the service had been performed, customers were informed that they owed significantly more than the amount originally quoted. In addition, Atlanta Solution Locksmiths claimed its employees were bonded and that the company was a member of the Associated Locksmiths of America, when neither claim was true. The company and its owner Asher Uziel signed an Assurance of Voluntary Compliance requiring them to pay $11,897 in consumer restitution, a $50,000 civil penalty and $50,000 for investigative expenses.
Unfair and Deceptive Marketing Practices
- Smart Industries, LLC d/b/a Techsmart and Guru Dharam Khalsa (“Techsmart”) resell electronics and other products primarily to military personnel via kiosks located near U.S. military bases and via the Internet. The company allegedly sold a number of its products for at least two times the price charged for the identical products at most retail and online stores. It represented that these prices were the items’ “original” prices when, in fact, they contained a significant additional amount allegedly attributable to the military person’s lack of credit history. Instead of disclosing this markup as part of its finance charge, the company represented that military personnel were actually paying lower interest rates. Techsmart also claimed falsely that purchasing its products would automatically improve consumers’ credit and that military personnel were entitled to claim an income tax deduction for products purchased from the company. The company and its principal entered into a settlement agreeing to cease doing business in the State of Georgia, to offer customer restitution in the amount of $171,335, and to pay $25,000 in penalties and investigative expenses.
- International Freight Systems, Inc. and Kukje, Inc. provided international shipping services of household consumer goods to international destinations, although the companies did not possess the required licenses and permits authorizing them to legally provide these services. The companies entered into an Assurance of Voluntary Compliance that prohibits them from offering international shipping services until they can prove that they have the proper licenses and permits. In addition, they paid a civil penalty of $3,000.
- OCP alleged that the Nevada-based company Nelson Research, LLC d/b/a Products for Life was misleading in its advertisements. The ads, which were run on local radio stations, gave the impression that the company was conducting a "national stimulus grocery survey", when it was merely conducting a marketing campaign for its grocery coupon booklets. The company entered into an Assurance of Voluntary Compliance requiring it to cease advertising and marketing efforts aimed at Georgia consumers immediately and restricted the company from doing any business with Georgia residents for five years. In addition the company agreed to pay $17,622 in consumer restitution, administrative fees of $1,000 and a civil penalty of $4,000.
- Armond's Manufacturing Company, Inc. advertised products for sale via its website but failed to fill consumers' orders. It advertised that products would be delivered within 7-10 business days and then failed to deliver them within that timeframe. The company also failed to provide refunds to consumers who had not received their orders. In resolution of this matter, the company entered into an Assurance of Voluntary Compliance with OCP and agreed to cease from offering products for sale unless they were actually in stock or would be readily available according to the company's shipping and delivery terms. It also paid $1,092 restitution to 43 consumers and a $5,000 civil penalty.
- OVRSTK, LLC, Aaron VanTosh, Individually, and Marco Welch, Individually, conducted a moving sale which lasted more than 90 days, and then did not cease doing business at that location. They have signed an Assurance of Voluntary Compliance requiring them to refrain from conducting a moving sale at their location on North Decatur Road in Decatur and to pay a $5,000 civil penalty.
- Mattress Firm, Inc. advertised products by comparing the product's sale price to a competitor's reference price, when the company could not substantiate that the competitor was in fact offering the product at that reference price in the area in the recent, regular course of business. Mattress Firm also advertised products by comparing the sales price to a competitor's reference price when the competitor's product in question was not substantially similar to the company's advertised product. The company agreed to pay a $20,000 civil penalty and $10,000 for administrative expenses.
- Fernando Faria, Individually, and formerly doing business as A&M Enviro Services, LLC, d/b/a Perk Conveyors, sent out postcards that gave the impression that the company was a delivery service, when it was actually marketing water filtration products. The company entered into an Assurance of Voluntary Compliance requiring it to cease directing its water filtration advertising and marketing efforts toward Georgia consumers immediately, and to refrain from doing any business with Georgia residents for 5 years. In addition, it must pay a civil penalty of $1,500.
- Damian Hawkins, Individually, and Products for Life, Inc. d/b/a Nelson Research represented that consumers could receive $2,000 in grocery savings for free by taking a grocery buying pattern survey. However, after completing the four-question survey, consumers were charged between $7.95 and $19.95 in fees to receive the coupons. The company also failed to honor its promise to pay $20 to $30 to consumers if they were not satisfied with the coupon booklets. In settlement of this matter, the company agreed to pay $17,617 in restitution to 2,062 consumers. It also paid a $4,000 civil penalty and $1,000 in administrative fees.
- Thanxme, LLC, d/b/a Loclly and loclly.com, and Michael Ferguson, the company’s principal officer, entered into an Assurance of Voluntary Compliance with OCP. Loclly had offered consumers discounted vouchers on various merchandise and services through its website. Even after Loclly had become aware that certain vendors were not honoring vouchers for their products or services, Loclly continued to advertise and sell vouchers for those products and services. When consumers discovered they were unable to redeem their vouchers, they contacted Loclly, but the company refused to issue refunds and would only offer store credit. This was also a violation of Loclly’s promise of “100% satisfaction guaranteed.” Loclly further misled consumers by listing inflated values for vouchers and misrepresenting when deals would expire in order to create a false sense of urgency. Loclly and its owner Ferguson paid $40,000 in civil penalties and $35,000 in administrative expenses. They also paid $4,105 in direct restitution to 42 consumers and another $15,000 to the State which was held in a restitution trust fund for newly identified eligible consumers.
- Patrick Johnson and Ann Brantley, who operated an online witchcraft supply company under the name of CyberMoon Emporium, failed to fulfill orders and to refund consumers’ money for unfulfilled orders. An Assurance of Voluntary Compliance was signed requiring payment of $1,827 in restitution to consumers and a $5,000 civil penalty.
- American Disposal Service of Georgia, Inc. d/b/a American Disposal Service failed to cancel services for consumers when requested and/or tacked on cancellation fees. The company entered into an Assurance of Voluntary Compliance with our agency and agreed to pay consumer restitution and a $10,000 civil penalty fee.
- Gilbert Michaels ran an office-supply business based in California under the names G.N.M. Financial Services, Inc. d/b/a IDC Servco and Mytel International, Inc. Georgia customers complained that they received calls from IDC Servco indicating that the company was their normal office supplier and encouraging them to order ink and toner immediately because an imminent price increase was planned. In fact, IDC Servco was not the customers’ normal office supplier and the planned “price increase” was just an attempt to create a false sense of urgency. Our investigation culminated in a settlement under which IDC Servco must refrain from falsely representing, directly or through its employees, agents, affiliated entities, or independent sales companies, to any current or potential Georgia customers that IDC Servco is associated in any way with the office supplier(s) with whom those persons have or have had an established business relationship. The settlement further required IDC Servco to cease conducting office supply-related business in Georgia and to pay a $10,000 civil penalty and $10,000 in investigative and legal expenses. In addition, it paid $150,000 to the State for a restitution trust fund for the issuance of refunds to yet-to-be-identified eligible customers.
- The South Carolina corporation Vacation Inspirations, LLC, and Randy Gardner, Individually and Joseph Shirley, Individually, sell travel club memberships in Georgia. The company is registered as a Buying Services Club with the State. OCP had entered into a previous Assurance of Voluntary Compliance with this company when it operated under the name Vacation Station d/b/a C.T.A. Travel, Inc. In the most recent investigation, consumers complained that the member's right to cancel was placed inconspicuously on the back of the first page of the contract. Consumers stated the back page was not shown to them during signing, nor were they made aware of their lawful 3-day right to cancel during the sales presentation. Further, the credit card receipt provided at the time of sale stated, "All Sales Final. No Refunds Allowed." Consumers who sent in cancellation requests after the 3-day period had elapsed were refused a refund by the business. OCP’s investigation confirmed that the version of Vacation Inspiration's contract that had been submitted for approval during the registration process differed in format from what was ultimately provided to and signed by consumers. The contract submitted to and approved contained a separate page containing the member's right to cancel on the front. The company entered into an Assurance of Voluntary Compliance requiring it to pay $16,968 in consumer restitution, an administrative fee of $35,000 and a civil penalty of $40,000.
- Market Media Experts, LLC, d/b/a CompassGeorgia.org, and James Williams, Individually, operate the website, CompassGeorgia.org. The business represented that it was affiliated with official state agencies and that Georgia consumers could use the website to apply for food stamps, Medicaid and other government assistance, which was not true. In fact, the website did not have the functionality to allow people to apply for any type of government assistance and merely contained links to government websites. The website included a form that appeared to be an application for government assistance, but actually was a means of collecting consumers' personal information which the business would then sell to other companies. The business signed an Assurance of Voluntary Compliance in which it agreed to clearly disclose that the website is not affiliated with the State of Georgia; that Georgia residents are not able to apply for government assistance through the website; and that it collects personal information in order to refer people to other companies. In addition, the business paid a civil penalty in the amount of $15,000 and an administrative fee of $5,000.
- The case against musical instrument retailer Guitar Center Stores, Inc. was initiated when OCP became aware of a promotional mailer containing an advertisement for a sale that included a fine-print disclaimer stating, "Some manufacturers have chosen not to participate in this promotion." It became evident that 330 manufacturers were excluded from the promotional offer, but not all of them actually "chose not to participate" but rather were excluded for other reasons. Moreover, some were excluded from online purchases, others were excluded from telephone purchases, and only a few were excluded from in-store purchases; however, Guitar Center did not clarify the differences and failed to even list the excluded manufacturers in its advertising materials. The company entered into an Assurance of Voluntary Compliance with OCP requiring it to use clear and conspicuous disclosures in its advertisements, refrain from making misrepresentations, and pay $20,000 in civil penalties and $20,000 in administrative fees.
- Stuart C. Cole and Mark C. Simpson pled guilty to conspiracy to commit mail fraud and wire fraud, and conspiracy to commit money laundering. The defendants admitted that from September 2007 through August 2009 they and others had conspired to operate a fraudulent private child support collection business out of Lake Park, Georgia. They defrauded custodial parents who were to receive child support payments by inducing them to sign collection agreements with their company Child Support Services and offering to assist the custodial parents in collecting child support payments from non-custodial parents, claiming that all fees connected with the collections would be the responsibility of the non-custodial parent. The defendants would then use fraud, deception and coercion to get non-custodial parents and their employers to send funds for “child support” to their business. Only a portion of the funds was ever given to the parents for the care of minor children. The remainder was retained by the defendants and their associates to lease homes, cars and boats. The conspiracy collected more than $2.3 million and retained approximately $1.2 million. Additionally, Cole and Simpson admitted to laundering the collected funds through bank accounts including an account for a corporation, purported to be a church, as “love gifts”. Sentencing will take place in April 2014 in the Valdosta Division of the United States District Court for the Middle District of Georgia. Cole and Simpson each face a maximum possible sentence of up to 20 years imprisonment and a maximum fine of $250,000, or both, on the mail and wire fraud conspiracy count, and up to 20 years imprisonment, a maximum fine of $500,000 or twice the value of the property involved in the transactions, whichever is greater, or both, on the money laundering conspiracy charge. They agreed as part of their sentence to forfeit all assets obtained directly or indirectly through this criminal activity.
- Andres Castaneda Ramirez pled guilty in the Northern District of Georgia to fraud-related activity in connection with identification documents, authentication features, and information. He was found responsible for hundreds of counterfeit identification documents (driver’s licenses, Social Security cards, and alien resident cards) that hit the streets in the Metro Atlanta area. He was sentenced to five years to serve.
- Neftali Alegria-Portugal, also known as “Jose”, managed and participated in a criminal enterprise producing high quality counterfeit driver’s licenses, Social Security cards, and alien residence cards. The U.S. Secret Service requested assistance regarding the investigation of “Jose,” a Hispanic male, who was allegedly selling counterfeit identifications to commit fraud. The FBI and Secret Service were investigating a fraud scheme which was targeting financial institutions including SunTrust Banks, Inc. (“SunTrust”) and Huntington Bank. The fraud scheme appeared to have been orchestrated by a group of individuals operating out of the Atlanta metropolitan area. Fraudulent withdrawals or transfers, or attempted withdrawals or transfers, from about 69 SunTrust Bank accounts occurred in a 10-month time frame. Alegria-Portugal had been supplying this group with counterfeit identifications to perpetrate the scheme. Alegria-Portugal pleaded guilty to identity theft and use of computers to manufacture counterfeit identifications in DeKalb County in August 2013 and was sentenced to time served, First Offender status, and received an additional five years to serve on probation and 150 hours of community service.
- On July 19, 2013, Mojdeh Briceland pled guilty in Cobb County and was sentenced to time served and an additional five years on probation and a fine of $1,000 for the use of computers to manufacture counterfeit checks and identification documents.
- Enrique Baez Martinez received 31 months in federal prison followed by three years supervised release for his role in an organized ring providing counterfeit identifications. Martinez pled guilty to Conspiracy to Produce and Sell Fraudulent Identification Documents and was the last of ten defendants charged in the ring to enter his plea.
- In October 2013 LaShunda Lovelace entered a guilty plea in Federal Court. She was charged with misappropriation of funds, penalties, and state records, and fraud with identification documents involved with WIC program. She was ordered to serve 18 months concurrently, followed by an additional 18 months of supervised release, for a total of 3 years. She was ordered to pay a $600 special assessment and restitution in the amount of $195,274.