The Federal Trade Commission has approved a settlement with Paul Schroeder, the last of seven defendants to face FTC litigation in conjunction with First Capital Consumers Group.
According to the settlement, Schroeder is required to transfer two houses and various bank accounts, worth an estimated $1.8 million, to the FTC.
He will also be banned from telemarketing, selling credit services, assisting others in these activities, violating the Telemarketing Sales Rule, and providing misleading purchasing information to consumers.
According to the complaint, First Capital Consumers Group, also operating as US Guardian United Consumers, Trans America United Benefits Group, Transglobal National Consumers Group, and First Guardian National Benefits, operated a fraudulent pre-approved credit card scam based in Toronto that targeted U.S. consumers with poor credit histories.
It advertised a pre-approved credit card, from MasterCard or Visa, with no annual fee and a credit limit as high as $2,500. A one-time processing and membership fee of between $189 and $219 was deducted electronically from the customer’s bank account.
The FTC charged that consumers who registered with First Capital never received a credit card. Instead, Schroeder would send some customers coupons and discount offers for cell phones, credit, magazines, legal services, prescription programs, satellite systems, car loans, and travel. Other customers received a stored-value card that required them to deposit money before using it.
The FTC alleges that Schroeder was aware that customers were not receiving their credit cards. In addition to First Capital, his largest client, Schroeder provided similar services for other fraudulent Canadian telemarketers, such as Titanium Blue, Consumer Service Center, Laurentian Financial, National Benefits Services, Liberty Benefits, FirstStar, Nor Am, NorMed, US Benefits, and United Financial.
The six other defendants in the First Capital case were two Canadian corporations and the four owners of First Capital: David Dalglish, Leslie Anderson, Lloyd Prudenza, and Mark Lennox. The FTC settled with Anderson on Feb. 4, and he paid $250,000 in consumer redress. The remaining five defendants received two bans and a monetary judgment equivalent to First Capital
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