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| Agency: Federal Trade Commission
Date: 30 March 2010 |
According to the FTC, the company prepared sales solicitations for automobile dealers telling consumers that a specific finance company would lend them money to buy a car, but the finance companies featured in the ads lacked business licenses and didn’t actually make any loans. The marketing company obtained lists of consumers from a credit reporting agency by falsely representing that the lists would be used to make prescreened firm offers of credit to consumers.
The settlement order bars the company and its principal from telling consumers they are pre-approved for, or are likely to receive, an extension of credit or financing unless the defendants know that a lender can make good on the offer for all eligible customers.
The order also prohibits the defendants from obtaining credit reports from consumer reporting agencies without a purpose authorized by the Fair Credit Reporting Act. The order imposes a $157,000 civil penalty that is suspended based on the defendants’ inability to pay. The full judgment will be imposed if they are found to have misrepresented their financial condition.
The defendants are Direct Marketing Associates Corp. and its president and owner, John M. Rainey, Jr. The Commission vote to authorize staff to refer the complaint and proposed stipulated final order to the Department of Justice for filing was 4-0. The documents were filed in the U.S. District Court for the District of Arizona, Phoenix Division.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the full force of law when signed by the judge.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.
(FTC File No. 0723002)