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U.S. District Court for the Middle District of Tennessee Grants FTC’s Motion to Temporarily Shut Down Alleged Credit Card Debt Relief Scheme

On November 21, 2022, the U.S. District Court for the Middle District Of Tennessee granted the Federal Trade Commission’s (FTC’s) ex parte motion for, among other relief, a temporary restraining order (“TRO”) to shut down an alleged credit card debt relief scheme. The order follows a November 7, 2022 complaint filed by the FTC against ACRO Services, LLC., and other related companies and named individuals, (hereinafter, “the defendants”) alleging violations of provisions of the FTC Act and Telemarketing Sales Rule (TSR).

In the complaint, the FTC alleged that the defendants made deceptive telemarketing misrepresentations to consumers, making false promises to eliminate or substantially reduce credit card debt, and charging excessive fees including large upfront fees and monthly charges. The complaint details that these upfront fees were usually several thousand dollars, with some individual charges as high as $18,000. Consumers were told they would never actually have to pay the upfront fee, because it was part of the credit card debt that would be eliminated. Further, the complaint alleges that the defendants instructed consumers to stop paying and cease communications with their credit card companies, and that doing so would enable the defendants to eliminate or substantially reduce their credit card debts after 12 to 18 months. 

According to the November 21 Opinion and Order, the court found a substantial risk of irreparable injury to consumers in the absence of a TRO. In its analysis, the court determined that the defendants had been defrauding consumers in violation of the FTC Act and TSR, and consumers would continue to be defrauded in the absence of a TRO enjoining the defendants’ activities.  

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