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September 8, 2010

MADIGAN, FTC AND SIX STATES SETTLE WITH FRADULENT DEBIT DEFENDANT

Florida Company Withdrew Millions from Consumer Accounts Across the Nation

Chicago — Attorney General Lisa Madigan today joined the Federal Trade Commission and six other states to announce a settlement with a bank processing company that debited more than $200 million from unsuspecting consumers’ bank accounts. The settlement assures the defendant will never again participate in debiting from consumer accounts or aid in a violation of the Telemarketing Sales Rule.

Defendant Derrelle Janey served as president of Your Money Access, LLC, based in Florida, from 2003 to 2006. The company was part of an elaborate scheme in which its employees processed unauthorized debits on behalf of deceptive telemarketers and Internet-based schemes, violating the Consumer Fraud and Deceptive Business Practices Act and the federal Telemarketing Sales Rule.

Janey is a defendant in the complaint along with YMA, YMA Company, LLC, and Tarzenea Dixon, former CEO of YMA. He is the fourth and final defendant to reach a settlement with the FTC and attorneys general. Default judgments were previously reached against YMA and YMA Company. Dixon also reached a prior settlement.

“These defendants were part of a scheme to deceive consumers and take their money,” Madigan said. “They processed charges that consumers often never authorized, and the products and services peddled by these telemarketers often turned out to be bogus.”

Attorney General Madigan, the FTC and state attorneys general of Iowa, Nevada, North Carolina, North Dakota, Ohio and Vermont alleged the company schemed to help its clients extract money from consumers’ bank accounts.

YMA’s clients—telemarketers—peddled government grant information, identity theft protection and prescription discount plans. Telemarketers placed cold calls offering consumers these products that were of questionable value and reliability, solicited their bank account information and passed on the information to the defendant to complete the debit.

Between June 23, 2004, and March 31, 2006, YMA processed more than $200 million in debits and attempted debits. More than $69 million of the attempted debits were returned or rejected by consumers or their banks for various reasons, an indication that in many cases consumers never authorized the charges. In many instances, merchants either failed to deliver the promised products or services or sent consumers relatively worthless items.

Under the settlement, Janey agreed to never participate in the processing of payments debited from consumer bank accounts or knowingly aid anyone who is violating the Telemarketing Sales Rule. The order imposed a $625,000 judgment against Janey, but due to his financial state he is only required to pay $15,000, which will go to the U.S. Treasury. The court suspended the remainder due to Janey’s financial dire straits. The court can lift this suspension if it finds that Janey lied about his current financial situation.

Assistant Attorney General Philip Heimlich handled this matter for Attorney General Madigan’s office.

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