Complaint Review: Capital First - Miami Georgia

Capital First sued by FEDS NOTE: The Commission authorizes the filing of 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. The complaint is not a finding or ruling that the defendant actually has violated the law. The case will be decided by the court. Copies of the complaint are available from the FTC's web site at http://www.ftc.gov and also from 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, 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. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. MEDIA CONTACT: Brenda Mack, Office of Public Affairs 202-326-2182 STAFF CONTACT: James Kohm or Lawrence Hodapp Bureau of Consumer Protection 202-326-2640 or 202-326-3105 (FTC File No. 022-3147) (Civil Action No. W03CA007) (http://www.ftc.gov/opa/2003/01/assailnetwork.htm) Scam Busted The FTC has filed charges against seven corporations and nine individuals for engaging in deceptive and unfair activities in the marketing of advance-fee credit card packages. The Assail Telemarketing Network marketed products under the names "Advantage Capital," "Capital First," and "Premier One." The FTC alleges that the defendants operate an advance-fee credit card scam through a network of boiler rooms, Canadian front men, and outsourced fulfillment and customer service centers. The court has temporarily halted the defendants' operation, froze their assets, and appointed a receiver to take over the corporate defendants. The defendants include: UT-based Assail, Inc. and Infinium, Inc., Market-Reps.com, Inc., all headquartered in Cedar City, Utah, TX-based Specialty Outsourcing Solutions, Inc. and NV-based Summit Communications International, Inc.; FL-based Capital First Benefits, Inc.; and, ID-based Premier One Benefits, Inc. According to the FTC, the scam works as follows: the defendants contact consumers with poor credit records, refer to their purported prior applications for credit, and tell them that they are now guaranteed to receive a credit card. In fact, the FTC says the defendants do not provide credit cards to consumers. Instead, they use an incomprehensible, digitally recorded "verification" process to conceal that the proffered credit card is actually a "benefit" package that includes an application for a stored value "pay as you go"card. After consumers submit the application, even this card also fails to materialize. In addition, the defendants slip in multiple "upsells" of expensive and dubious products at the end of the verification process. The defendants then debit consumers' bank accounts for the upsells, sometimes with additional recurring monthly charges, without the consumers' authorization. The FTC alleges that consumers commonly incur debits against their bank accounts for approximately $174 for the "credit card" package and an additional $50-$100 for each upsell.The FTC alleges that when consumers try to cancel their purchases and prevent further debits, they are frequently met with a well-orchestrated "customer service" scheme designed to frustrate consumers' attempts to obtain refunds and cancellations. Even when consumers are successful in canceling some of their debits, the defendants often fail to cancel future debits for other products purportedly purchased during the telemarketing call. As a result, consumers' accounts are later debited for additional sales about which they were not aware. http://www.ftc.gov/os/2003/01/assailcmp.pdf For Release: February 27, 2003 http://www.ftc.gov/opa/2003/01/assailnetwork.htm International Telemarketing Network Ordered To Stop Marketing Bogus Advance-Fee Credit Card Packages An international telemarketing network will continue to be barred from illegally marketing advance-fee credit card packages under a preliminary injunction entered by the U.S. District Court in Waco, Texas. The Federal Trade Commission has alleged that the network enabled fraudulent sellers in the United States to hide behind bogus Canadian front men as they telemarketed illegally through boiler rooms running from the Caribbean, United States, Canada and India. The order continues safeguards imposed by the court in an earlier temporary restraining order, and also extends the court-appointed receiver's control over certain corporate defendants to include the personal assets of Kyle Kimoto, president of Assail, Inc. and an alleged leader of the scheme. Numerous law enforcement agencies and private organizations provided substantial assistance that enabled the FTC to unravel this complex telemarketing network. Among these groups special credit must be given to the Better Business Bureaus of Reno, Nevada; Idaho Falls, Idaho; and Southeast Florida. All three BBB's provided the FTC with information about the hundreds of complaints they received after the defendants opened mail drops in their locations that pretended to be the sellers' places of business. Officials of the Consumer Services Investigation Division in British Columbia, Canada; the Florida Department of Banking and Finance; and the Attorney General's offices of Iowa, Idaho, and Nevada also helped to reveal the falsity of these alleged Florida, Idaho, and Nevada businesses. In fact, the FTC has alleged that the sellers, and their Canadian officers, were elaborate "fronts," created by defendant Assail, Inc. to hide the fraud. Officials of MasterCard International, Dun & Bradstreet, and other businesses also provided valuable information to support the FTC's allegations that the defendants' claimed connections to legitimate businesses were false. The court entered three preliminary injunctions - the result of one group of defendants contesting the FTC's allegations, while two groups agreed to the entry of separate orders. The court entered a litigated preliminary injunction order against the first group of defendants: Assail, Inc., headquartered in St. George, Utah, its president, Kyle Kimoto, and two of its officers, Cliff Dunn and Mike Henriksen; Summit Communications International, Inc., purportedly headquartered in Carson City, Nevada, and doing business as Advantage Capital, and its president, Matthew h*o; Capital First Benefits, Inc., purportedly headquartered in Miami, Florida, and its president, Ben Lee; and Premier One Benefits, Inc., purportedly based in Idaho Falls, Idaho, and its president, Johnson Salanga. The order freezes the assets of all defendants and places the assets of the corporations and the personal assets of Kyle Kimoto under the control of Robb Evans and Associates, the court-appointed receiver. The other two groups of defendants agreed to the entry of stipulated preliminary injunctions. The first order against Infinium, Inc., and Market-Reps.com, Inc., headquartered in Cedar City, Utah, and their president Brian Schofield, freezes the defendants' assets and places the receiver in control of the corporate assets. The second order, against Specialty Outsourcing Solutions, Inc., headquartered in Waco, Texas, and its officers, Jay Lankford and Lee Murphy freezes the assets of the defendants, but does not place the defendants into receivership. The preliminary injunctions were issued on February 4, 2003 by the U.S. District Court, Western District of Texas, Waco Division.