The Federal Trade Commission has closed one of five online businesses accused of fraudulently offering consumer loans and credit cards.
Johnny Ray Dunn of Jacksonville, Florida, offered VISA cards and loans that required "no credit check" on the Internet for $49. Consumers who paid the advance fee received a list of companies offering loans and self-help credit materials--but no cards.
Dunn claimed that he had an "excellent record" with the National Bureau of Consumer Affairs, which was in fact a business that he owned, not a consumer advocacy group. Dunn has transacted business under other names, including the National Bureau of Credit, NBC Services, and Fidelity National Financial Services.
A settlement negotiated with Dunn requires him to pay $3,500 in consumer redress within 15 days and bans him from misrepresenting himself or his businesses in connection with any product or service he sells in the future.
Dunn's offers, which were posted online for about six months, had been advertised for at least two years in print publications, including Income Opportunities and the National Enquirer. He made more than $200,000 during that time, according to FTC attorney Catherine Fuller, but had only enough assets to pay $3,500 by the time of his settlement.
The FTC had filed charges against Dunn and four other online businesses, including Amstar Finance, Glendale Associates, GlobalE, and Direct Telemarketing in June as part of a nationwide crackdown on telemarketers who promise but never deliver loans or credit for fees of up to hundreds of dollars. The four cases are expected to settle soon, FTC spokeswoman Bonnie Jansen said.
Attorneys general in 15 states participated in the crackdown, called Project Loan Shark, and are working on eight of their own cases.
These cases come on the heels of another FTC closing: an online pyramid scheme that drained investors of an excess of $10 million. Fortuna founder, Augustine Delgado, was issued a bench warrant and was found in contempt of court for his failure to return the money to the federal government. He is currently at large, living in Belize, although FTC attempts to repatriate the stolen money continue. The Fortuna Alliance site was closed down in June and is the largest online fraud case to date, according to the federal agency.