FTC Orders Operators of Credit Card Reduction Scam To Pay Millions And Get Out Of Debt Relief Business
Sometimes taking on a new debt to pay off your existing debt can be a wise move. If the new loan has a lower interest rate than the debts you are using the loan money to pay off, then you will have a higher debt to credit ratio in the short term, but in the long run, you will save a lot of money on interest. This is called debt consolidation, and it is a popular debt repayment strategy. In fact, taking out a debt consolidation loan can be the simplest solution to your debt. It is less time consuming than filing for bankruptcy or negotiating with each creditor individually to settle your debt or extend the repayment term. Getting a debt consolidation loan should not cost you an arm and a leg, and there are plenty of scams out there that will charge you an unreasonably high price to consolidate your debt. This month, the FTC shut down one of those Florida-based scams. A Plantation debt consolidation lawyer can help you consolidate your debt while avoiding scams.
FTC Shuts Down Orlando Companies That Scammed Elderly and Financially Vulnerable Customers
Until recently, Gino de Paz operated GDP Network LLC, Grace de Paz operated G&G Success LLC, and Shabana Khublal operated G&N Squared LLC together with Grace de Paz. These companies purported to offer credit cards with low interest rates, and they aggressively marketed their products through telemarketing calls and emails. The customers they targeted tended to be elderly, deeply in debt and earning little or no income, or both. While there is no harm in offering debt consolidation loans to consumers who need them, the aforementioned companies deceived customers about the consequences of signing up for these loans. Specifically, the companies charged consumers a hefty fee to be connected with low interest loans or to qualify for them; participating customers paid anywhere from $995 to $4,995 for the companies’ services.
In July 2020, the Federal Trade Commission (FTC) filed a lawsuit against the companies and the owners. Gino de Paz, Grace de Paz, and Shabana Khublal responded to the lawsuit, but the companies did not. The court ruled against the individual defendants and entered a default judgment against the companies; it found that the violated the Florida Deceptive and Unfair Trade Practices Act, among other laws. In February 2022, the court ordered the defendants to pay a money judgment of $5.3 million, but it agreed that it will partially suspend the amount after Gino and Grace de Paz pay $225,000 and Khublal pays $200,000. The FTC press release did not specify whether the defendants, which are located in Orlando, must pay restitution to the victims.
Contact a South Florida Bankruptcy Lawyer About Unfair Lending Practices
A South Florida debt consolidation lawyer can help you make wise choices about debt consolidation loans so you can find a loan that will improve your credit score and save you money on interest. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.