Lighthouse Credit Foundation, Inc. and its co-defendants will pay more than $2.4 million in consumer redress, and they are prohibited from making deceptive claims about credit counseling or debt management services.
The proposed settlements prohibit the companies and their principals, Mary M. Melcer and J. Steven McWhorter, from making misrepresentations about credit counseling or debt management services, including non-profit or tax-exempt status, financial counseling, interest rate reductions, and the deductibility of fees.
The defendants must honor cancellation, refund, and termination requests from consumers, and follow certain recordkeeping and reporting requirements to assist the FTC in monitoring their compliance. In addition to a payment of $2,371,380 in consumer redress, the corporate defendants will also pay $415,000 in refunds to consumers who actually complete the debt reduction seminars.
The FTC's complaint alleges that Jeffrey E. Poorman and Daniel M. Melgar, Sr., without participating in the alleged deception, received proceeds of the illegal conduct as shareholder distributions from co-defendant Flagship Capital Services Corporation, Integrated's parent company. Poorman settled with the FTC, and has agreed to $105,000. The FTC is proceeding with its claims against Melgar. ■
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