By Rita R. Robison
Two men and their companies are being charged with billing consumers without their consent and not providing promised refunds. A federal court temporarily halted the defendants’ alleged deceptive practices, froze their assets, and appointed a receiver to take control of the business and its assets,
The defendants charged
Michael Bruce Moneymaker, Daniel De La Cruz, and their companies obtained consumers’ personal information from websites that claimed to match consumers with payday lenders, and then enrolled consumers in worthless “continuity” programs, the Federal Trade Commission said in a statement.
The programs included an up-front cost of up to $49.99 each, plus additional weekly or monthly fees of up to $19.98. Continuity programs charge recurring fees until a consumer takes affirmative action to cancel.
Personal information solicited
The charges allege that after consumers submitted their personal information online, they saw a pop-up box called “Terms and Conditions” that looked like part of their payday loan application. The box asked consumers to provide an authorization but didn’t mention the continuity programs.
Consumers learned of their enrollment in continuity programs when they checked their bank account, or when their bank accounts were overdrawn because of the defendants’ actions.
Customer service problems
Frequently, when consumers called the defendants’ customer service numbers to cancel or ask for a refund, no one would answer the line, the line would go dead, or the consumer would be put on hold for an extended period of time, the commission said. If consumers reached someone in the call center, the defendants’ employees attempted to discourage them from demanding their money back.
The defendants’ call center employees allegedly told consumers they authorized the charges as part of a payday loan application and that they were being charged for a third-party offer with benefits including a free Visa card, free voicemail, free airline tickets, and a $10,000 secured credit line.
Call center employees also promised consumers refunds that consumers never received. In some cases, consumers who had been enrolled in multiple programs were told they had to call separate numbers to discuss each one, even though the call center handled calls for all of the defendants’ programs.
The defendants allegedly told call center employees to limit the number of refunds offered and evaluated employees’ performance based on their ability to keep the refund rate as low as possible. The defendants’ employees often refused refund requests, gave refunds only to the most persistent consumers, or falsely promised refunds until consumers stopped calling. Some consumers were told that a manager would call them or their calls would be returned, which never occurred.
New ‘free trial’ offers video
To help consumers avoid the hidden costs in some “free trial” programs, the FTC is releasing a new video. “Free Trial Offers” tells how to check out these offers before you sign up, and what to do if you find yourself enrolled in a free trial offer without your permission.
It is good to see guys like this being put out of business.