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Posts Tagged ‘creditor’

Bankruptcy law changed the debt settlement industry

July 31st, 2008

This is an excellent article by our good friend and professional debt negotiator, Charles Phelan. In this article, Charles reveals why the debt settlement industry has changed and how debt settlement critics have it all wrong.

If you have time, this is a must read! Especially now with soaring gas prices, job loss and people in more debt than ever before. Charles offers audio courses and personal debt settlement coaching. if you are serious about settling your debts the RIGHT way, read on.

A lot more people are becoming interested in debt settlement as an alternative to bankruptcy. That’s because a new bankruptcy law was enacted on October 17, 2005, and it means a rude awakening for many consumers seeking a fresh start in bankruptcy court.

It used to be that 7 out of 10 people filing personal bankruptcy were granted Chapter 7 status, where the unsecured debts are totally wiped away. That has changed under the new rules. If your income is above the median for your state, or you can pay back at least $100 per month toward your debts, then you’ll be turned down for Chapter 7. Instead, you’ll be shifted into Chapter 13, where you pay back a portion of the debt over 3-5 years.

It gets worse. When the court calculates your allowable living expenses, it will use the approved IRS schedules, not your actual documented expenses. So even if you don’t think you can pay $100 a month or more, the judge will probably disagree. Instead of a fresh start, many people will be faced with the grim reality of a harsh 5-year plan, on a court-mandated budget that forces them to adopt a much lower standard of living. That’s where debt settlement starts to look pretty attractive.

Yes, I know debt settlement has its critics. I’ve criticized aspects of the industry myself. But what the critics don’t seem to understand is that this approach is for people who would otherwise go bankrupt! Let’s examine the three main complaints against debt settlement and see where the critics are missing the mark.

“Debt settlement has a negative impact on your credit score.”

Wow. Big deal! Pretend it’s two years from now. Would you rather have an A+ credit rating or be totally free of debt? Pick one please, because you can’t have both. All debt reduction programs have a negative impact on credit scores. That’s why only people who truly can’t keep up with their bills should go into one of these programs. But it’s pointless to worry about your credit while you’re being crushed with debt. That’s like worrying about how the yard looks after your house has burned down.

“You might have to pay taxes on the canceled portion of the debt.”

I’ve always been amazed at how frequently this lame criticism is repeated in article after article. Yes, it’s possible that you may need to pay taxes on forgiven debt balances, but the odds are against it. That’s because the IRS allows insolvent taxpayers to exclude canceled debts. So unless you have a positive net worth, you probably won’t need to pay taxes on your settlements. And even if you did, so what? You’d be paying taxes because you saved a bunch of money off your debts! And this is a problem?

“Collection activity will continue and you might get sued.”

Yes, if you fall behind on your bills, your creditors will most certainly continue attempts to collect what’s owed, and one or more of those creditors might sue you in civil court. But again, this criticism totally misses the mark. Collection activity is already a function of being in debt trouble. At least debt settlement allows the consumer to use the collection process to eliminate debt through negotiated compromises. Even lawsuits need not be cause for panic, since they can often be settled out of court. The only reason to allow a legal action to proceed to the point of wage garnishment, property lien, or bank levy is lack of financial resources with which to settle. And if that’s the case, the debtor should be talking to a bankruptcy attorney anyway.

In contrast, let’s look at some of the positives of debt settlement.

1. You can save $1,000s versus any other method of debt elimination (except for Chapter 7 bankruptcy, which is much more difficult to accomplish now that the new law is in effect).

2. You can get out of debt in 2-3 years, and much faster if there is some available home equity to work with. This is a lot better than 5 years in the financial boot camp of Chapter 13 bankruptcy, or 5-9 years in a credit counseling program.

3. You keep control over the process more than with any other approach.

4. You maintain personal privacy. With bankruptcy, your case file becomes a matter of public record, easily located via Internet search by future employers, landlords, or creditors.

5. You retain your dignity while working through your financial problems. Bankruptcy still feels like failure to a lot of people. Debt settlement represents an honest and ethical alternative to that extreme solution.

6. You can adjust your monthly funding into the settlement program up or down depending on real-world conditions in your financial life. If your income fluctuates from one month to the next, or you get hit with an unexpected expense, it won’t torpedo the whole program. The built-in flexibility of debt settlement gives it a huge advantage over other options, all of which require a fixed monthly payment.

Once you’ve made the determination that debt settlement makes sense for your situation, you’ll need to decide whether to go it alone or seek professional assistance. For people who aren’t easily intimidated, there’s no question that the do-it-yourself approach is the way to go. For others who can’t handle the least bit of pressure or just want to focus their time and energy elsewhere, hiring a professional settlement company may be the correct choice.

If you do decide to take the do-it-yourself approach, follow these tips:

* Use a privacy manager on your telephone service to screen creditor calls so that you only speak to creditors when you’re ready.

* Make sure you have a solid game plan for building up money to settle with, and set the funds aside in a separate bank account.

* Do not send settlement funds until you have the deal in writing. No exceptions!

* After paying the settlement, follow up to obtain a zero balance letter from the creditor, so you don’t have bogus collection problems later on.

* Know your rights as a consumer by reading the free resource articles on debt, credit, and collections at the Federal Trade Commission website: www.ftc.gov

* Don’t be intimidated or pressured into accepting a settlement deal that you can’t handle.

Remember, thousands of people settle their own debts every year without the need for lawyers or bankruptcy. You can do it too if you’re disciplined, determined, and prepared to ignore some of the crazy stuff that bill collectors say. When you’re finally debt-free, you’ll feel a lot better about having worked it out on your own.

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation’s largest debt settlement firms, he is the author of the Debt Elimination Success Seminar™, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation.

The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost.

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Credit counseling versus debt consolidation

July 31st, 2008

Credit counseling and debt consolidation are often confused. People who are in debt but don’t necessarily understand debt usually end up thinking they want to consolidate their debt if they cant pay their bills. Or people who believe the can pay their debt but want a smaller payment think they need credit counseling or debt management.

Lets break down the difference so you can make a wise choice and avoid some dangerous money and credit pitfalls.

Credit counseling
First off, you must be employed or have a steady income to enter a debt management plan. No sense in setting up new monthly payments if you cant pay.

Credit counseling also referred to as Debt management is a program that is used to help people avoid financial devastation and a probable bankruptcy. When your debt exceeds what your income is (debt ratio), you can quickly spin into free fall and become upside down. Once that happens, its next to impossible to swim up to the top. Credit counseling is easily offered by a non profit debt counseling company such as CareOne.

These types of programs will take your existing debts and restructure your payments and interest by setting up a payback program with your creditors. The positive to this type of program is that you can avoid lawsuits and going into collections because the debt counseling company will work directly with your creditors for you.

The debt management or credit counseling plan will take into consideration all your debts and your monthly income and create a new affordable budget for you. You then pay a set amount each month to the debt management company and they disburse funds to all of your creditors.

Do I pay the credit counseling company?
No. If it’s a good solid non profit plan such as CareOne, you are never asked to pay them. They receive contributions from the creditors. The reason a creditor will pay these contributions is because the debt counseling program is helping the creditor to avoid a total loss, so its good business for creditors to contribute to these types of plans. If it weren’t for them, you’d probably go screeching straight to a bankruptcy attorney and the creditor would get zip!

How long does it take?
That depends on how much you can afford. Since the program is based on your current income and expenses, that amount can change if your income decreases or increases or once you begin owing less debt. The debt management plan is flexible and can be structured according to your personal budget and bills.

Usually, you can be in a debt management plan for 12-36 months and break out of the debt and start fresh. The other great thing about debt management is that they educate you along the way so that you don’t repeat this mistake again.

What debts can I include?
Debt counseling also know as credit counseling easily covers unsecured debts. Things like credit cards, medical bills, cell phone debts, lines of credit. Anything that is unsecured. Secured debt like a car, house or boat cannot be included because they must be paid according to their equity and if you were to stretch the payments out by paying less, then the equity would eventually lose all its value.

What does happen however, is that the new structured debt on the unsecured bills you owe, will begin to free up other funds in your budget so that you can pay those secured bills.

What about my credit?
You have to consider this. If you are considering a credit counseling program then obviously you cant pay all your bills. Most likely, you’ve already began falling behind in your payments and that is being reported to your credit reports. When you start a debt management plan, the counselor will work with your credit to either freeze or reduce the interest and lower the payments. This new contract will be approved and the creditor will begin accepting these new payments as “current and accepted”. All the prior late payments will still be on your credit but once you are out of debt and able to be free of the massive debt load, then you can begin to work on restoring your credit. It’s really a matter of worrying about your credit later, if you are already in serious debt trouble. The existing bills and a plan to tackle those takes precedent. A bankruptcy would kill your credit as would charge offs, repossessions and judgments so this is a good alternative.

Debt Consolidation
Many people confuse these terms and in actuality it can mean two different things. What you need to look for is the program terms. Are you looking to reduce your monthly payments because in you’re in financial trouble or are you looking to lower your overall debt and have one payment, one rate.

Debt consolidation can either be, consolidating all your debt into a debt management plan such as described above or consolidating all of your debt into a new LOAN. That’s the key here. A new loan means you probably still have good credit but you realize you are paying way too much when you add all your loans up, especially considering their separate interest rates.

In this case, a new loan may be the type of program perfect for you. You may want to consolidate 5-6 credit card payments into one with one payment, one rate. It simplifies everything and can save you a ton of cash!

Some debt management programs also call their debt relief plans, consolidation because you are consolidating your bills into a new plan so be sure you know which type of consolidation you are talking about.

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Dealing with collection accounts

July 29th, 2008

I’ve seen it all with credit reports. Judgments, tax liens, charge offs and collection accounts. Those are the tougher items. You probably assume that a 30, 60, or 90 day late is much easier to remove than a collection account. Not so and here’s why.

An original creditor, say a Capital One, isn’t going to alter your payment history. They simply do not negotiate and alter credit ratings unless they’ve made a mistake, then they’ll update it.

A collection agency however, is much easier to deal with because they are a third party collecting the debt, so their sole purpose is to get paid. If that means negotiating with you, they’ll do it. Collection agencies are all about quotas. They deal in the masses of accounts and every penny adds up.

So, if you have a collection account on your credit here are some tips to deal with it.

Validation of debt. First, you should use the FDCPA (Fair Debt Collections Practices Act) to validate the debt. If the collection agency doesn’t have appropriate records then it will be removed with no need to pay anything.

When agencies buy accounts, they buy them in bulk. So your account may have been assigned with just basic information like your name, address, account number, and balance. if you send a letter requesting to verify the debt and the records are either too old from the original creditor or the agency never received any supporting documentation when they bought it, then presto chango! Deleted.

Negotiate the rating. This technique is often used because a collection agency wants to be paid at any cost. You can negotiate with them to remove the bad mark in exchange for payment. If they agree, get it in writing FIRST. Once you have the approval letter from the agency that they AGREE to delete the mark in exchange for money, then send in your payoff with a copy of the letter. Give them 30 days to update your credit history and then request a copy of your credit reports.

If the mark is still there, send a copy of the letter certified mail to the collection agency except this time, look up the Registered Agent online of the collection agency and send the copy to them demanding that the item be removed immediately as per your agreement. Send a request for investigation at the same time to the credit bureaus. That will trigger a dispute being sent to the collection agency which may speed up their reporting. Keep that letter as if your life depended on it. You will probably need it again in the future if the item somehow pops back up.

Settlements. If the balance is quite large you can negotiate with the collection agency to settle the debt for pennies on the dollar. If the debt is quite old, your odds are even better BUT be careful. Before you promise anything in writing make sure you have checked the debts statute of limitations. If it has expired then legally nothing can be done to you. You may still want to settle it to remove it from your credit reports, BUT, check that statute of limitation as well. If it’s nearing the 7 year time frame then why bother?

While you’re at it, feel out the agency for the removal method as well. You’ll have less leverage in this situation because they are already agreeing to take much less for the debt, but it cant hurt to add that request, especially if the agency thinks they have one shot at money from you.

And finally. NEVER EVER pay a collection account without attempting one of the above. If you do, you will simply end up with a paid collection account which is still very negative.

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Tags: address account agency agreement appropriate records bill collectors bureaus capital one charge offs collection accounts collection agencies collections credit credit history creditor creditors debt debtors debts delete disputes exceptions expired fairness FDCPA fdcpa settlements judgments letter mail make mistake money negotiate online payment history payments practices quotas rates remove report settle sole purpose statutes strike a deal tax liens third party validate validation vod

Writing to a collection agency? Use caution

June 29th, 2008

I’ve spent many years writing a lot of letters. Not love letters unfortunately but letters to deal with credit issues. Letters to creditors, collection agencies and credit bureaus.

You’d be surprised just how many people do not how to write a letter, not because they’re uneducated but because these letters are tricky in nature. Anything you put in writing to a creditor or collection agency can come back to haunt you in a big way.

When a consumer uncovers a negative entry on their credit reports, their first instinct is to contact the source and try to improve it or remove it. But if your dealing with a collection account that is a big mistake unless you know what you’re doing.

The collection agency can easily get you to admit the debt is yours or worse, pay it before you’ve even had a chance to determine if its truly accurate. I don’t think you’d pay someone else’s bills so why pay an invalidated debt?

People do though, all the time. The truth is, you should never simply pay a collection item on your credit reports without first asking to have the debt validated. Validation of debts is where you ask the collection agency to provide proof to you that the debt is valid such as, balance, date of last activity, charges and supporting documentation.

Once you have clearly investigated the debt then you would be wise to send the agency a letter. Phone calls don’t preserve your rights so make sure everything is in writing. Remember, a collection agency isn’t your creditor. They are hired simply to collect debts.

Whether you decide to pay it or dispute it, you need to be careful how you word your letter because it will become ammunition for the debt collector to come after you.

If you decide to pay it, because you’ve determined it is accurate and you owe the money, draw up a letter advising the collection agency that you will pay the debt if they agree to remove the item from your credit reports. You really don’t want a “paid collection account” on your credit because it still looks bad. You want it gone.

Some may say, well isn’t that illegal? Absolutely not. A collection agency owns the right to the debt and just as they reported it, they can remove it. Most of the time the agency only places it on your credit anyway as a collection tool. To get you to contact them. It’s a bargaining chip. It is not the same as a creditor who must report your credit history during the time you do business with them.

I’ve deleted tons of negative entries on credit reports back in the day before I began offering financial advice simply because I asked. You cannot underestimate how bad the agency wants to collect the debt and they will bargain with you.

On the other hand, if you feel the validation process proved the debt isn’t yours or is in some way inaccurate, then you need to proceed with great caution in your letter because anything you say WILL be used against you.

I recommend you first check the SOL (Statute of Limitations) on the debt. Debts expire and if yours has, legally you cannot be sued. Yep, it’s true and everyday thousands of consumers pay old expired debts.

In your letter to the collection agency be sure to list your complaint, I.e, my debt is past the statute of limitations, the debt is not mine, the time allowed to place it on my credit reports has passed and so on.

Be specific and mention nothing about promising a payment if you dispute the debt. Doing so can renew the SOL on the debt all over again.

Do some research before you write any letters and be careful to review and research what you put in those letters to protect yourself. There’s a lot of information online about writing sample letters, researching expired debts and dealing with collection agencies.

Do research until you’re satisfied that you are handling the issue correctly.

Source

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Tags: ammunition big agency billing bills bureaus collection agencies collections collector collectors consumer consumers credit creditor creditors debt debtor rights debts disputes expired haunt instinct letter lists make mistake money online payments report sample collection agency letters sol spent statute of limitations statutes surprise truth validate validation

Summer is credit check time: Get credit scores free

June 21st, 2008

When you’re looking for convenience, FreeCreditReport.com is pretty good. I’ve tried many different credit report sites, some out of business now, but FreeCreditReport has served up over 20 million customers and they’ve pretty much wired what the consumer wants.

They gives you access 24/7, they make it easy to order, they deliver all three credit reports in very consumer friendly formats and they give you the free credit scores.

I like all the tools they offer along with the product and I like being to log in quickly and easy and manage my credit reports.

Summer is a time where people buy new cars, boats, and rental property so if you’re getting ready for a purchase, check your credit BEFORE you apply for any loan to make sure everything looks good. One small problem and you can see your rates jump.

With credit card companies penalizing consumers more than ever before, you need to make sure your credit stays good. Otherwise you may see a rate jump as much as 9%.

Make sure you keep an eye on your credit score and pay everything on time so it doesn’t go down. Remember, getting your credit reports from FreeCreditReport.com does NOT add a hard inquiry to your credit, so it wont harm your score.

There is no one thing that will always improve your score. In general, there are several things you can do to increase or maintain your score.

Pay your bills on time This is the single most important factor tied to having a good score.
Establish a credit history Having a few debts is good, it shows that you can responsibly pay for items. Keeping those accounts open for many years also helps ‘age’ your report. Having an established credit history for 5 years is better than only having credit for 5 months.
Don’t take on too much debt The more debt you owe the higher risk you are to future creditors.
Get your FREE credit score and more!

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Affordable credit repair solutions

June 16th, 2008

Consumers are often overwhelmed by credit repair. The words alone send some consumers into denial. Most are afraid they’ll make their credit worse or they assume hiring someone to do it for them costs too much money.

That’s not always the case. With the advent of technology, streamlining credit repair is getting faster and better for consumers. About 10 years ago, it was a tedious process getting your credit reports to a credit repair agency and waiting for results.

Nowadays, it can be as easy as signing up online and sitting back waiting for the results. Don’t get me wrong, I think a lot of people have what it takes to do the task themselves but if you’re one of millions who find it overwhelming or simply don’t understand or have the time to fix your credit, then hiring a pro can be beneficial.

As always, as with any service, know who you are hiring. When seeking a credit repair company always look to their policy of refunds or guarantees. Make sure the company has a clean and clear BBB record (Better Business Bureau) and make a list of questions to ask before you sign up.

Once you’ve decided who you’ll hire then you can get on the road to better credit. Critics often say that credit repair is impossible. I don’t buy that at all. I’ve repaired many many credit reports. It’s possible and fortunately for us consumers, the bureaus and creditors make lots of mistakes.

I say make your credit the absolute best you can. Once you get there, keep it pristine.

A good source of FAQ about credit repair is DSI. Click here to read their FAQ on credit repair procedures, guarantees and more.

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Tags: 10 years advent agency bad credit repair bbb best better business bureau bureaus company consumer consumer credit repair consumers credit creditor creditors denial dsi credit repair fix fortune lists make mistake money much s online repair report s services solutions

How to ruin a good debt settlement offer

June 11th, 2008

By Charles Phelan, ZipDebt CEO

People keep trying to reinvent the wheel when it comes to debt negotiation and settlement. It’s not rocket science, and there are really only a few simple principles that need to be followed to avoid problems. It’s the fancy footwork and dodgy tactics that cause all the trouble.

Here’s a good example. Recently, I’ve been asked by several people about a recommendation they came across on the Internet regarding debt settlement letters. I have not yet been able to locate the source of this spectacularly bad “advice,” so I don’t know the exact language of the recommendation. But the basic idea is that a special clause be added to the settlement letter with the aim of avoiding income taxes on the cancelled debt.

A little background first. When a creditor forgives or cancels a debt, and the portion forgiven is $600 or greater, the creditor is required to report that to the IRS on Form 1099-C, Cancellation of Debt. This amount must be claimed as ordinary income by the debtor on their income tax return for that year.

Someone apparently thinks they have invented a way of dodging the tax issue by getting the creditor to add a clause to the settlement letter that the unpaid balance is “in dispute,” or words to that effect — the theory being that no tax liability can result from a debt that is in dispute rather than formally cancelled or forgiven. In other words, if the written-off portion is classified as being “in dispute” rather than cancelled, then the creditor does not need to issue a 1099-C, and if you get audited you produce the letter to prove to the IRS that no agreement was reached.

This is a DANGEROUS technique that should NOT be used.

The purpose of a settlement letter is to document PERMANENT RESOLUTION of the debt. It’s a document that proves once and for all that you are done with that debt forever. And proper documentation is ESSENTIAL to the settlement process. The main reason is because of the massive $100 billion debt purchasing industry that scoops up millions of old debts for pennies on the dollar, with the aim of making a hefty profit on what they collect.

Mistakes happen all the time. People that settle only based on a verbal agreement may find that their (supposedly settled) debt was sold to a debt purchaser who simply refuses to believe the account has been settled. “Prove it,” they will say. Without a settlement letter, you have no leg to stand on. It’s your word against theirs, and don’t expect any cooperation from the original creditor. They already lost money on you and won’t want to spend any more labor-hours trying to help you fix your own problem two years later.

If you have a rock-solid settlement letter, then none of this is a problem, and you can instantly put to bed any issues that might crop up along these lines. However, if you have DISPUTE language in the settlement letter, then you do NOT have a settlement letter at all! You are left wide-open to collection activity and possible litigation in the future. You will not be able to prove that the settlement was actually a formal settlement acknowledged by both you and the creditor.

So this is a good example of someone trying to be too clever for their own good. No one wants to pay more taxes than necessary. But by trying to make a settlement letter do “double duty” like this, you run the risk of collection activity on the unpaid balance. Further, there is usually no reason to have such language added in the first place. The IRS allows debtors to exclude 1099-C amounts from income to the extent by which they are insolvent at the time of settlement.

A majority of people who pursue debt settlement are insolvent (i.e., they have a negative net worth), and therefore do not need to pay taxes on the forgiven balances anyway. What a shame to blow a nice settlement over something that was never even an issue in the first place!

Charles Phelan is a debt settlement coach and expert. To learn more about Charles expertise in debt negotiations and settlement visit him here.

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Tags: agreement bad advice cancellation of debt ceo clause collections creditor debt debt negotiation and settlement debt settlement debtor debts disputes exact language fancy footwork fix form 1099 income income tax return income taxes irs letter line make mistake money negotiate phelan proper documentation rocket science ruin s settle spending tax liability unpaid balance wheel

Defendants in Debt Collection Scheme Aimed At Hispanics Agree to Settle FTC Charges

June 11th, 2008

Two defendants have agreed to settle Federal Trade Commission charges for allegedly victimizing Spanish-speaking consumers nationwide by posing as debt collectors seeking money the consumers did not owe. They and the corporate defendants they controlled have been barred from further violations of federal law involving debt collection.

According to the FTC’s complaint, Maria Oceguera, her daughter Dulce Rickards (aka Dulce Ugalde and Dulce Ruiz), and others sold an English-language course, “Inglés con Ritmo.” They advertised the course as free except for a shipping and handling fee.

Several years after the defendants stopped selling the course, they tried to collect money, typically $900, from consumers who had purchased or inquired about the course. An overwhelming majority of the consumers who were contacted owed nothing, and yet the defendants routinely engaged in a variety of deceptive debt collection practices. At the FTC’s request, in 2007 a federal judge stopped the operation and froze the defendants’ assets.

Under the settlement, the defendants are barred from violating the FTC Act by misrepresenting that they’re collecting on a valid debt, that they’re attorneys or represent attorneys, that they will take action they cannot take legally or do not intend to take, and that nonpayment of an alleged obligation will result in arrest, imprisonment, or loss of property or wages. The settlement prohibits the defendants from misrepresenting the consequences of paying or not paying a debt, making misrepresentations in order to collect a debt, and misrepresenting or omitting any fact material to a person’s decision to buy or use a product or service.

The defendants are banned from violating the Fair Debt Collection Practices Act (FDCPA) by using falsehood or deception to collect a debt, indicating that they’re attorneys or represent attorneys, and representing that nonpayment will result in arrest, imprisonment, or loss of property or wages unless the action is lawful and they intend to pursue such action. They are also prohibited from threatening to take an action unless it’s lawful and they intend to do so, and from using a business name other than the collector’s real name.

Oceguera and Rickards are also barred from violating the FDCPA by collecting an amount not expressly authorized by the agreement creating the debt or permitted by law;harassing consumers, including causing a telephone to ring or conversing with consumers to annoy or abuse them; and failing to notify consumers of their right to dispute and obtain verification of their debts and to obtain the name of the original creditor.

In addition, the court ordered the same permanent injunctive relief against the companies controlled by Oceguera and Rickards: Tono Publishing; Promo Music; and Tono Records, dba Tono Music; and Professional Legal Services.

The settlement with Oceguera and Rickards includes a $1,186,754 judgment, all but $50,934 of which is suspended based on their inability to pay. The full judgment will be imposed if they are found to have misrepresented their financial condition. The settlement also contains standard record-keeping provisions to allow the FTC to monitor compliance with the order.

By a 4-0 vote, the Commission approved the filing of the consent decree in the U.S. District Court for the Central District of California. On May 1, the court approved the FTC’s settlement with Oceguera and Rickards. On May 27, the court entered a separate final judgment and order for permanent injunction against the corporate defendants.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. A consent decree requires approval by the court and has the force of law when signed by the judge.

Copies of the consent decree and order are available from the FTC’s Web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.shtm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.