A Florida federal judge entered a judgment for over $23 million last week against Robert Guice, the alleged operator of a telemarketing scam offering debt relief services to consumers.
The lawsuit, brought by the Federal Trade Commission and the Florida Attorney General, alleged that Guice created Loyal Financial & Credit Services, LLC (“Loyal”), Life Management Services of Orange County, LLC (“LMS”), and multiple shell companies to contact financially distressed consumers by phone and offer various services aimed at reducing credit card debt. The services included transferring debt to no-interest credit cards and urging consumers to default to allow negotiations with credit card companies.
The government began investigating Guice and the companies in 2016 for multiple violations of Section 5 of the FTC Act (15 U.S.C. § 53(b)), the Florida Deceptive and Unfair Trade Practices Act, or “FDUTPA” (Fla. Sta. §501.201 et. seq.), and the Telemarketing Sales Rule, or “TSR” (16 C.F.R. § 310.1 et. seq.). The Court initially granted the government’s request for a temporary restraining order, causing all business activities to cease in June 2016.
The government alleged that Loyal, LMS, and the shell companies operated as a common enterprise that was controlled by Guice. Under Guice’s leadership, the enterprise engaged in deceptive business practices, made material misrepresentations and omissions when selling services, and violated numerous provisions of the TSR, including calling consumers on the Do Not Call Registry.
On December 7, the Court entered summary judgment against Guice, the only remaining defendant in the lawsuit. The Court found that Guice, LMS, and Loyal tricked customers into purchasing services by misrepresenting the amount of money they would save, fabricating their affiliations with credit card companies, and failing to disclose the possible impact of their actions on customers’ credit scores, among other deceptive actions. In determining the monetary damages, the Court relied on the government’s expert accountant who calculated the customers’ net losses to be over $23 million.