- with readers working within the Chemicals industries
Even though the Federal Trade Commission is closed due to the government shutdown, the agency, along with the Nevada Attorney General, just obtained a temporary restraining order against American Tax Service and its operators for allegedly engaging in a tax debt relief scam.
By way of background, when taxpayers get behind on paying their taxes, and they are unable to resolve their tax debts, the Internal Revenue Service files a Notice of Federal Tax Lien, which becomes a matter of public record. The consumers named in these tax liens (and state equivalents) then often become the target of marketing efforts by tax debt relief companies.
The FTC and the Nevada Attorney General alleged that American Tax Service sent letters to consumers that appeared to be from government agencies, which threatened the consumers with legal action. As the FTC and the Nevada AG explained, "Defendants use these mailers to scare taxpayers into calling the toll-free number listed on the letter. Defendants' mailers appear to be from a government entity and typically demand payment and threaten to seize the letter recipient's property. When taxpayers call the number, they reach Defendants' sales representatives who then pitch the caller on Defendants' tax debt relief services." The FTC and the Nevada AG also alleged that, in those calls, and in other marketing materials, they promote that they can help taxpayers settle their tax debts for a fraction of what is owed.
The regulators charged, however, that the company doesn't deliver the promised results and often takes no action to help the consumers.
In announcing that the agency had obtained a TRO against the American Tax Service and its operators, Christopher Mufarrige, the Director of the FTC's Bureau of Consumer Protection, said, "People trying to pay down their tax debt shouldn't have to worry about fraudsters pocketing their hard-earned money. The FTC will not hesitate to act to stop companies like ATS that target hard-working Americans with bogus debt relief services."
What are the important takeaways here?
First, although the federal government is closed, the FTC is still pursuing some enforcement actions. And, of course, just because there's a federal shutdown, that doesn't mean that state attorneys general can't step in to take action in appropriate cases as well.
Second, impersonation schemes continue to be a big priority at the FTC. While sometimes it may be difficult to get consumers' attention, this case makes clear that shouldn't pretend to be the government in order to do so.
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