Facts

The Federal Trade Commission filed suit and sought a permanent injunction against defendants Brandon Frere and his companies, American Financial Benefits Center, also doing business as AFB and AF Student Services, Ameritech Financial, and Financial Education Benefits Center, for alleged violations of the Federal Trade Commission Act, 15 U.S.C. Section 53(b), the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. Section 6101-6108, and the Telemarketing Sales Rule, 16 C.F.R. Section 310.

PLAINTIFF'S CONTENTIONS: Plaintiff contended defendant and his companies misled nearly 40,000 consumers with information about lowering their student loan debts. Specifically, plaintiff contended defendant Brandon Frere and his companies sent personalized mail to consumers that falsely claimed they were entitled or eligible for federal programs that permanently reduced their monthly debt payments or entitled to total loan forgiveness. Plaintiff further contended defendant and his companies then charged up to $800 in illegal up-front fees for the purpose of enrolling consumers in federal loan assistance programs. Plaintiff additionally contended defendants also charged consumers $100-$1,300 advance fees for enrollment in a purported financial education program, followed by $49-$99 monthly membership fees for the life of the loan, typically 10-25 years.

DEFENDANTS CONTENTIONS: Defendants denied plaintiff's contentions.

Result

The case settled for $62,000,000, all but approximately $9 million of which was suspended. The court granted plaintiff's permanent injunction and banned defendant and his companies from providing debt relief services and further prohibited defendants from violating the Telemarketing Sales Rule.