Financial Advice

FTC and State of Florida Win Summary Judgment: Court Orders Ringleader of Debt-Relief Scam to Pay $23 Million and Imposes Industry Bans

Kevin W. Guice defrauded more than 10,000 consumers nationwide

A federal judge in Florida has permanently banned Kevin W. Guice from the telemarketing and debt-relief industries, agreeing with the Federal Trade Commission and the State of Florida that he founded and operated a massive debt-relief scam that took in over $23 million from more than 10,000 consumers, until halted by a June 2016 temporary restraining order.

“Guice bombarded consumers with illegal robocalls and tricked them into paying thousands of dollars for worthless credit card debt reduction services,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Working with our partners in the Florida AG’s office, we were able to bring Guice to justice and stop this massive fraud.”

According to the evidence the court used to make its ruling, Guice’s operation consisted of two telemarketing companies and 11 shell companies which worked as a common enterprise to sell two types of fraudulent debt relief services, all while concealing Guice’s involvement. Operating out of a boiler room in Orlando, Florida, Guice’s telemarketers inundated consumers with millions of robocalls, including calls to telephone numbers on the FTC’s National Do Not Call Registry.

Using aliases such as “Bank Card Services” and “Credit Assistance Program,” Guice’s telemarketers falsely claimed to be a “licensed enrollment center” for major credit card networks like MasterCard and Visa, and promised consumers that they would substantially and permanently lower their interest rates. Guice charged consumers illegal up-front fees of between $500 and $5,000 for this service, but consumers did not obtain the permanent and substantial interest reductions they were promised.

Guice’s operation also pitched a bogus credit card debt-elimination service, charging between $2,500 and almost $26,000 up front, claiming that they could access funds from the government or from a lawsuit against the credit card industry to pay off consumers’ credit card debt. There were no such funds, and consumers who purchased Guice’s debt-elimination service wound up deeper in debt with damaged credit scores and higher interest rates and late fees.

What the Final Order Means

The order and permanent injunction resolve the FTC’s and the State of Florida’s charges against Guice under the Federal Trade Commission Act, the Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act. The order contains both injunctive and monetary relief, permanently barring Guice from all telemarketing, either directly or through an intermediary.

The order permanently bars Guice from advertising, marketing, promoting, offering for sale, selling, or assisting anyone else in any of these activities in relation to the provision of debt-relief products or services. It also permanently bars him from making a range of material misrepresentations related to the marketing or sale of any product.

Next, the order permanently bars Guice from failing to clearly and conspicuously disclose any of the items above, as well as from taking a cash advance against consumers’ credit cards or causing billing information to be submitted for payment before getting consumers’ express written consent to do so.

Finally, the order imposes a non-suspended judgment of $23,099,878 against Guice, payable to the Commission, for restitution to the consumers he defrauded. In addition to cash, Guice will surrender his 55-foot ocean yacht (the “Tuff Life II”), a luxury-watch collection, and other personal property to a court-appointed receiver.

This case was brought jointly with the State of Florida’s Office of the Attorney General, and the FTC appreciates its assistance in this matter.

This article by the FTC was distributed by the Personal Finance Syndication Network.

The post FTC and State of Florida Win Summary Judgment: Court Orders Ringleader of Debt-Relief Scam to Pay $23 Million and Imposes Industry Bans appeared first on Personal Finance Syndication Network.

Advertisements
Standard
Financial Advice

Make Sure You Die Before Your Parent PLUS and Federal Student Loans Are Forgiven

Life is ironic at times. And more questions are coming up about what happens if I die and owe federal student loans.

Here is the answer.

A Death Discharge is available for these types of federal student loans: Direct Loans, Grad PLUS Loans, Federal Family Education Loan (FFEL) Loans, and Perkins Loans.

There are two types of federal student loans to consider with a Death Discharge: Parent PLUS and regular student loans.

Parent Plus Loans After You Die

So you did a good thing and helped someone go to school. You may have taken out a Parent PLUS loan or even consolidated more than one into a new Direct Loan and opted to repay it under the Income Contingent Repayment (ICR) program.

As it stands right now if the holder of a Parent PLUS loan dies or the student dies who received the benefit of the loan – the loan can be discharged.

Student Loan Holder Dies

If the student is the obligated part on a federal student loan and passes away then the loans will be discharged and since the balance will be zero there will be no claim against the estate or remaining assets of the student debtor.

No Tax Liability

As it stands as of the date of this article, federal student loans are discharged tax-free the balance goes to zero.

The no tax liability death discharge is currently scheduled to expire at the end of 2025 when the tax provision it is a part of will expire. Hopefully, the law will be extended.

Of course, tax rules can change so be sure to confirm the current tax liability by seeking advice from a licensed tax professional you trust.

How to Get a Death Discharge

The executor of the estate or someone managing affairs for the deceased person will need to contact the Parent PLUS or regular federal student loan servicer and advise them of the death. They will have to supply an original death certificate when requested. A notification alone is not going to be sufficient.

Document all communications with the servicer and send items requested by some means that provides proof of delivery.

Here is the Big Problem

There are many people who are repaying their federal student loans under an income-driven repayment plan. As it stands right now, people taking that approach will make payments for 20-25 years and if the loans are forgiven before they die, the forgiven amount will be taxable. The IRS will expect income tax to be paid on the forgiven amount unless the responsible party is insolvent or up to the amount the responsible party becomes insolvent.

If the person dies after the loans are forgiven, the Internal Revenue Service (IRS) will proceed against the remaining assets of the debtor to collect the forgiven student loans through the repayment program.

Crazy, Huh!

So, if you are older it may make more sense and cost less money overall if you extend out the repayment term passed when you estimate you may die. When you pass the student loan can pass with you.

Private Student Loans

There is no standard policy or rule when it comes to private student loans. You are on your own there.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post Make Sure You Die Before Your Parent PLUS and Federal Student Loans Are Forgiven appeared first on Personal Finance Syndication Network.

Standard
Financial Advice

Common Tax Filing Mistakes

Benjamin Franklin once said, “But in this world, nothing can be said in certain, except death and taxes.” You can procrastinate and put off dealing with your taxes until the deadline looms, but you cannot escape them; and worse, you can even incur penalties and delay your refund if you miss the deadline.

If you are expecting a refund from the IRS, you want to receive it the soonest possible time, and mistakes in filing can derail this. Here are common tax-filing mistakes that can delay your tax return process.

Failing to disclose all income. If you forget to include all income on your return, the IRS will surely be keen to uncover it. They will let you know that you missed something and, depending on when they discovered it, you can face penalties and interest for the unreported income.

Incorrect Social Security Numbers (SSN). Your income statements, retirement plan contributions, savings account interests, among other crucial transactions, are all keyed to your social security number; so do not forget to correctly write down your social security numbers when doing your tax returns. The IRS has stopped putting the SSNs on tax package labels due to privacy issues.

Bad Math. These are the most common mistakes done on tax returns. If you want to minimize errors, use tax-software programs to file your return, but you still need to make sure that your initial numbers are correct. Simple typographical errors can make a lot of difference. Discrepancies like these will be spotted by the IRS and they will definitely let you know about them. In a lot of cases, they will be the one correcting the mistake and refigure your taxes for you – but you don’t want to give them the chance, so make sure your numbers are right.

Unsigned Forms. You must always sign your return. If you and your spouse are filing jointly, make sure that both you sign he forms. If you forget this, you will have to refile the forms and your return can be held up for weeks. You can avoid this problem if you file electronically.

Spelling Errors. This is particularly important in names. Make sure that all names listed on the return reflect the ones listed on your

Social Security card. For recently married women who are changing their surnames, you must alert the Social Security Administration so this change will not cause you any problem when you make your first joint return.

Wrong Status. This is another mistake that can be avoided if you file electronically, as the software only allows you to choose one status. If you filing your return on paper, check off the proper filing status.

Missing Proper Tax Credits of Deductions. Your credit eligibility depends on your income. Take due diligence in following the instructions. The IRS has an Interactive Tax Assistant to help you determine whether you are eligible for deductions or tax credits.

These are just a few of the common tax filing mistakes. Preparation is still key. Do not wait until the deadline before preparing your tax return. If you find yourself overwhelmed, you can ask for an extension. You can also find a good preparer if you are not very confident that you understand everything that needs to be done.

[original content]

This article by Myrtle Bautista first appeared on TaxAct and was distributed by the Personal Finance Syndication Network.

The post Common Tax Filing Mistakes appeared first on Personal Finance Syndication Network.

Standard
Financial Advice

FTC Obtains Court Order Barring U.S. and Canadian Scammers from Marketing, Selling Internet-related Services and Misrepresenting Their Relationship with Consumers

Defendants ordered to pay more than $4.6 million

At the Federal Trade Commission’s request, a U.S. district court in Illinois has handed down a final judgment and order requiring nine related Canadian and U.S. defendants to pay more than $4.6 million for tricking small businesses into paying for Internet directory listings, search engine optimization services, or website design and hosting services they never ordered.

The FTC announced the case against the Premium Business Pages defendants in June 2018, as part of the multi-agency “Operation Main Street” law enforcement initiative directed to scams targeting small businesses.

The default judgment and order, issued by the U.S. District Court for the North District of Illinois, Eastern Division, also permanently bans the two individual and seven corporate defendants from advertising, marketing,  or selling any Internet directory listings, search engine optimization services, or website design and hosting services.

The order further prohibits the defendants from misrepresenting, among other things, that they have a preexisting relationship with consumers, that they have ordered their services, or that they owe money to the defendants.

Finally, the order bars the defendants from seeking to collect money on any outstanding accounts that are still open, or transferring any of these account to anyone else for collection, and imposes record-keeping and reporting provisions to ensure their compliance with its terms.

Case History

The FTC’s complaint charged the defendants with making unsolicited calls to small businesses since 2013 to induce them to pay for unordered Internet directory listings, search engine optimization services, or website design and hosting services. The defendants allegedly targeted businesses using several names, including Premium Business Pages, Ameteck Group, The Local Business Pages, and Data Net Technologies.

When first contacting businesses, the defendants claimed to be calling to collect on a past-due invoice for one of their services. In reality, the small businesses contacted never ordered or agreed to buy anything from the defendants and were never sent a bill. In many cases, the defendants’ telemarketers threatened that the business’s accounts would be turned over to “collections” or would be “red flagged.”

In some cases, even after a business paid money it did not owe, the defendants called back weeks later, sometimes claiming to be a different company demanding payment for other “outstanding invoices,” or claiming that the first payment was only the first installment.

Shortly after the FTC filed the complaint, the judge granted the agency’s request for a temporary restraining order against the defendants, halting their allegedly illegal conduct pending trial. A complete list of the individual and corporate defendants in this case can be found in the recently entered court order.

This article by the FTC was distributed by the Personal Finance Syndication Network.

The post FTC Obtains Court Order Barring U.S. and Canadian Scammers from Marketing, Selling Internet-related Services and Misrepresenting Their Relationship with Consumers appeared first on Personal Finance Syndication Network.

Standard
Financial Advice

My School Closed Because the President Was Stealing From It

Question:

Dear Steve,

I went to Hallmark Institute of Photography, took out almost 80K in student loans from both Granite State and Sallie Mae. Maybe 6 months after I finished the program (10 month accelerated photography program supposed to equal a bachelors degree) the school closed due to the president being caught embezzling 2.6 million for personal use, come to find out the “director of financial aid” was in marketing beforehand, they accepted pretty much anyone who applied and advertised as all aspects of photography but received maybe a handful of “business lessons” which basically taught me how to do taxes.

Am I eligible for private and federal loan discharge and reimbursement due to closure or fraud?

Margaret

Answer:

Dear Margaret,

The Hallmark Institute of Photography situation was quite a mess.

Your federal student loans can be discharged under the closed school discharge program.

Your private loans are still due and no discharge is available for those unless your individual lender has a special program. Which I doubt. This is one of the reasons I advise people to avoid private student loans.

If you 1) attended a school that closed less than three years ago, 2) meet the eligibility requirements for a closed school discharge, and 3) want your loans discharged, contact your loan servicer about applying for a closed school discharge now instead of waiting for three years to receive an automatic closed school discharge.

By receiving a closed school loan discharge,

  • you have no further obligation to repay the loan,
  • you will receive reimbursement of payments made voluntarily or through forced collection, and
  • the record of the loan and all repayment history associated with the loan, including any adverse history, will be deleted from your credit report.

Be sure to keep a record of all of your communications and copies of correspondence,

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post My School Closed Because the President Was Stealing From It appeared first on Personal Finance Syndication Network.

Standard
Financial Advice

I Don’t Like the Loan Modification Program My Daughter is In

Question:

Dear Steve,

My daughter enrolled in a loan modification program about 5 months ago. She is still being garnished as well as paying the required monthly fee. Every month they request copies for documents already received. Is this a ploy to continue garnishment, and what can she do legally?

Wanda

Answer:

Dear Wanda,

Thanks for being a good mom and looking out for your daughter.

Obviously, I don’t know which program or exactly what kind of debt this might be for based on your question.

What I can give you is some general advice though.

If your daughter enrolled in some type of debt intervention program she most likely signed and agreed to terms of service with the provider. That agreement is where you would need to look to exactly understand what services she agreed to purchase.

It is not unusual for the written agreement to provide a much different description of the service than the commissioned salesperson did on the telephone.

I like to give companies the benefit of the doubt on the first pass of dealing with a customer service issue. So after reading and understanding the client agreement your daughter signed, have your daughter contact the company to explain her service frustrations.

If the company does not want to or can’t correct its poor service issues then you can escalate your complaint. Here is my process for doing that. See How to Get Your Money Back From a Debt Relief Company if You Feel Like You’ve Been Scammed.

Underlying all of this is the fact this situation involves creditor(s) your daughter owes. Those relationships have their own legal agreements your daughter entered into. And if your daughter is already being garnished then she was most likely already sued and the creditor(s) won a judgment against her.

For legal issues, you should always consult a licensed attorney in your state. One place to look for such an attorney is here.

From your question, I can tell you there is a lack of clarity about what is going on, a misunderstanding of the services purchased, a lack of good customer service being provided, or a combination of those issues.

Keep digging and please come back and post an update in the comments section below and let me know what happens next.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post I Don’t Like the Loan Modification Program My Daughter is In appeared first on Personal Finance Syndication Network.

Standard
Financial Advice

How Can I Break My Brooklyn College Transcript Out of Jail?

Question:

Dear Steve,

I have 110 credits at Brooklyn College but can’t get my transcripts released due to owing 10,000 (due to health problems!). They sent it to a collection agency, so I can’t even do a payment plan.

What do you advise? Should I fight the actual debt and pay a lawyer, would filing for bankruptcy help?

Thanks,

Naf

Answer:

Dear Naf,

Apparently, this is a debt you owe Brooklyn College directly. They are withholding your transcript as collateral until the debt is paid. That is not unusual for colleges to do.

Just because debt has been sent to a collection company that does not mean a payment plan can’t be established if Brooklyn College has authorized them to do so. The college does not have to do so.

You can fight the school and attempt to negotiate with them. If you are not getting anywhere and need your transcript the irony is you can file bankruptcy to get it.

A Chapter 7 bankruptcy would end the debt you owe the school so they can no longer hold the transcript. If you filed bankruptcy today you should be able to get your transcript in about 90 or so days.

Filing bankruptcy does not prevent you from applying for federal student loans in the future.

The bottom line here is if you can’t get anywhere with the school or collection agency and/or you need your transcript quickly, then filing bankruptcy would do the trick.

Filing a Chapter 7 bankruptcy in NYC can be accomplished for around $1,500 if you shop around.

You may want to read my post How to Find a Great Bankruptcy Attorney for some tips on what to look for. Shopping by price alone is not the best approach. You also need to find an office you like and can work with.

So, filing bankruptcy is less expensive than the debt and you can rebuild your credit after the bankruptcy.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

The post How Can I Break My Brooklyn College Transcript Out of Jail? appeared first on Personal Finance Syndication Network.

Standard