FTC Unseals National Consumer Council Suit

The Federal Trade Commission unsealed a lawsuit alleging that National Consumer Council Inc. in Santa Ana and a complex web of affiliates bilked millions of dollars from debt-burdened consumers with deceptive promises to negotiate discounted settlements of their accounts.

Saying National Credit was “masquerading as a nonprofit,” the FTC also alleged that the companies routinely called consumers who had placed their names on the national do-not-call registry. Clients paid hefty and often undisclosed fees, but many wound up so much deeper in debt that they had to file for bankruptcy protection from creditors, the FTC said.

The lawsuit, filed April 23 in U.S. District Court in Santa Ana, asks the court to force the companies to cancel their contracts with consumers and repay them.

The Times reported Tuesday that the government had filed the suit under seal and had shut down National Consumer Council and its affiliates. A spokeswoman for the company denied wrongdoing, saying it had helped many consumers.

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-- E. Scott Reckard