credit card debt

A vendor claiming to eliminate consumer credit card debt has, itself, been eliminated from the debt relief industry by Federal Trade Commission investigators this month. According to an FTC statement dated Jan. 20, The Hermosa Group accepted a ban on offering debt relief services under terms of a settlement with the enforcement agency.

FTC investigators alleged that The Hermosa Group advertised debt relief services using a series of alluring sales pitches which included claims that they could stop harassing phone calls and eliminate credit card balances for less than the amount owed. Instead, the defendants resold leads collected from their ads to third-party debt relief agencies without thoroughly investigating whether those companies could effectively deliver on the advertisements' claims.

A unanimous commission vote authorized FTC enforcement agents to assess an $8.5 million penalty on the defendants. That fine will be wiped clean, provided the principals of The Hermosa Group pay a $500,000 fine and agree to steer clear from soliciting customers for any type of credit card counseling or financial services in the future.