Credit Card Interest Rate Reduction Scam Operators Permanently Banned from Debt Relief Activity Under Agreement with FTC and Florida Attorney General
Operators of alleged credit card interest rate cut scam will be permanently banned from the debt relief industry as part of court orders resolving charges by Federal Trade Commission and Florida Office of the Attorney General.
The defendants – Gino de Paz, Grace de Paz and Shabana Khublal – allegedly engaged in deceptive and abusive practices in violation of the FTC Act, the Telemarketing Sales Rule and Florida’s Deceptive and Unfair Trade Practices Act by selling their credit card interest rate reduction services. to consumers across the United States.
“The defendants in this case were taking advantage of the fact that Americans were facing mounting debt by falsely promising to permanently reduce their credit card interest rates,” said Samuel Levine, acting director of the Bureau of FTC Consumer Protection. “The FTC is proud to partner with the Florida Attorney General to end these scams.”
“These scammers tricked victims – consumers in financial difficulty, as well as seniors – into signing up for their debt relief program. Instead of receiving the promised aid, the victims went further into debt while the defendants made millions,” said Florida Attorney General Ashley Moody. “Now, together with the FTC, we have stopped defendants from bombarding consumers in Florida with deceptive telemarketing calls promising financial relief, and they will be forced to pay.”
In a lawsuit filed in July 2020, the FTC and the Florida Attorney General’s Office accused the de Pazes, Khublal and other defendants of blasting consumers with telemark calls promising to permanently and substantially reduce interest rates on their credit cards. After posing as representatives or affiliates of consumers’ credit card companies, the defendants allegedly claimed they could save consumers thousands of dollars in credit card interest, allowing them to repay their debt much faster.
All of these claims were either untrue or unsubstantiated, according to the complaint. At most, defendants sometimes opened new credit card accounts at lower introductory rates and transferred existing consumer debt to the new cards. Instead of producing the savings customers expected, defendants’ service would often have left people even more indebted after paying initial fees of between $995 and $4,995, as well as substantial fees to transfer their existing debts to new ones. cards.
Under the terms of the agreements, Gino de Paz, Grace de Paz and Shabana Kubhlal are permanently prohibited from advertising or selling debt relief products and services. They are also prohibited from misrepresenting material facts in connection with any product or service. The order also prohibits deceptive and abusive telemarketing acts and practices, unsubstantiated claims and prohibited payment practices.
The orders impose monetary judgments of $5.3 million, which will be partially stayed once the de Pazes pay $225,000 and Kublal pays $200,000. The full judgment would become due immediately if any of the defendants were found to have made a false statement about their financial situation. In addition to reaching settlements with the individual defendants, the court also entered default judgment against the other defendants in the case: GDP Network LLC; G & G Success LLC, also doing business as YF Solution LLC, QSC Professionals and GCD Management LLC; and G&N Squared LLC.
The Commission’s vote approving the stipulated final orders was 5-0. The orders were filed in the U.S. District Court for the Intermediate District of Florida, Orlando Division. The FTC appreciates the assistance of the Florida Attorney General’s Office, the Florida Department of Agriculture and Consumer Services, the United States Postal Inspection Service, the United States Secret Service, and the County Sheriff’s Office. of Orange to bring this case.
NOTE: The stipulated final orders have the force of law when approved and signed by the district court judge.