Robocall Defendants Reaped $15.6M, Regulators Charge

The Federal Trade Commission working with the Florida Attorney Generals Office, filed suit against a group of related defendants, charging them with bombarding consumers with illegal robocalls in an attempt to sell debt relief services and credit card interest rate reductions.

A federal court granted the regulators request for a temporary restraining order halting the operation, which the FTC and AG said took in more than $15.6 million since January 2013 and made hundreds of thousands of robocalls.

Collectively known as Life Management Services of Orange County, LLC, the defendants used generic names like Bank Card Services and Credit Assistance Program when calling consumers, claiming to be a licensed enrollment center for credit card networks such as MasterCard and Visa, the FTC and AG said. The defendants promised to work with credit card companies or banks to substantially and permanently lower credit card interest rates and save consumers thousands of dollars by paying off their balances three to five times faster, according to the complaint filed in Florida federal court.

Instead, consumers were charged an upfront fee of between $500 and $5,000 and the defendants made, at best, a rudimentary effort to contact some credit card companies, the regulators alleged.

The defendants further deceived consumers by offering a credit card debt elimination service. By tapping into a government fund, the defendants claimed that they could pay off a consumers debt in 18 monthsfor an upfront payment of between $2,500 and $20,000. Since no such fund actually exists, the consumers who paid for the purported service only found themselves deeper in debt, according to the complaint.

How did the agency obtain its evidence against the defendants? In the case against Life Management, the FTC told the court it relied upon a telephone honeypot, a bank of phone lines designed to attract robocalls. FTC investigators were the parties answering the calls, and had the opportunity to interact with callers to identify them and document their claims.

While the action seeks a permanent stop to the defendants operations and money for consumer refunds for violations of the Federal Trade Commission Act, the Telemarketing Sales Rule, and Floridas Deceptive and Unfair Trade Practices Act, so far the court has only ordered a temporary halt pending an upcoming hearing.

To read the complaint and the TRO inFTC v. Life Management Services of Orange County, clickhere.

Why it matters:The case was the 39th action taken since January 2015 as part of a collective enforcement effort with state regulators and other countries to halt robocall operations. Actions with agencies ranging from the United Kingdoms Information Commissioners Office to the offices of the attorneys general in Colorado, Missouri, and Washington, among others, have all focused on combatting the nuisance of illegal robocalls, the Commission explained. To further these efforts, the FTC announced that 11 international regulatory organizations signed a new memorandum of understanding to share information and intelligence in the worldwide fight against unsolicited messages and calls. Signatories, all members of the London Action Plan, include regulatory agencies in Australia, Canada, Korea, Netherlands, New Zealand, South Africa, and the United Kingdom, with the FTC and the Federal Communications Commission signing on for the United States.

Can an online lender help solve your money troubles?

Andrew Housser is a co-founder and CEO of, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.

7 ways to declutter your debt

Andrew Housser is a co-founder and CEO of, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.

What You Need to Know about CFPB's Proposal to Ban Mandatory Arbitration Clauses in Financial Contracts

On May 5, 2016, the Consumer Financial Protection Bureau (the CFPB) published in the Federal Register its 376-page proposed rule to limit the use of mandatory arbitration clauses in certain financial contracts. The proposal focuses on contract provisions that bar consumers from filing or participating in class action lawsuits in the event of a dispute, thereby limiting consumers recourse to arbitration (the Proposed Rule). The Proposed Rule, if passed, would allow consumers to bring class action lawsuits against banks and other financial service providerseven if the parties have an existing agreement to waive their right to a trial.[i] The Proposed Rule marks the CFPBs latest effort in moving away from the general preference for enforcing arbitration agreements as a matter of freedom of contract between the consumers and companies, a principle that was long established by the Federal Arbitration Act of 1925 and the Supreme Courts landmark decision in ATamp;T Mobility v. Concepcion.[ii] The CFPB has already previously banned the use of arbitration clauses in mortgage loan contracts.

The limitations set forth in the Proposed Rules are twofold: first, financial services providers may not use a pre-dispute arbitration agreement to dismiss or stay class actions. This limitation must also be clearly stated in the arbitration clause.[iii] Second, the Proposed Rule requires financial institutions to report records and correspondence concerning the arbitration proceedings to the CFPB, such as the claims raised, the awards received, as well as certain correspondence exchanged with the arbitration administrations. The Proposed Rules 90-day comment period closes on August 22, 2016.

The Proposed Rule applies to several categories of financial services providers, including loan brokers, lease and finance auto brokers, banks, credit-card companies, financial data processors, debt collectors, and certain merchants and retailers.[iv] Note that the ban only applies to financial contract with respect to the financial products and services specifically enumerated in the Propose Rule, which include student loans, debt relief services, credit card and charge card transactions, certain auto and title loans, payday and installment loans, debt settlement and foreclosure rescue services, and credit counseling.[v] Companies that also provide other financial services not enumerated in the Proposed Rulessuch as providing business creditsmay continue to use the arbitration clauses to bar class action suits with respect to those services.[vi]

The Proposed Rule came as a result of a 3-year long research conducted by the CFPB on the use of pre-dispute arbitration agreements in connection with the offering or providing of consumer financial products or services. As stated by the CFPB director, Richard Cordray, the CFPB has determined that many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them.[vii] Among other things, the research according to the CFPB indicates that consumers are generally reluctant to bring individual lawsuits against financial companies to recover losses less than $1,000, and even fewer consumers are willing to engage in arbitrations. By permitting class actions (or having several person(s) sue on behalf of a larger group of people who would otherwise not elect to files a complaint in court), the CFPB hopes to provide those consumers an effective tool to challenge financial companies through aggregated claims so as to eliminate the barriers to judicial relief that may arise in consumer finance contexts, which often involve small-dollar individual claims.

Opponents of the Proposed Rule have raised concerns that the ban might end up hurting rather than helping the consumers. Their chief argument is that a proliferation of class actions will only help plaintiffs lawyers and not consumers, and that the costs incurred by financial institutions to defend against litigations and to submit arbitration information will get passed on to consumers in the form of higher service fees. They have also noted that the CFPB ignores the benefits and opportunities from online dispute resolution, and that the Proposed Rule will force market participants to eliminate the use of consumer arbitration processes altogether.

The CFPB is now in the midst of collecting public comments and has already received an abundance of feedback from both consumer advocates and industry advocates. Dorsey will continue to monitor the development of the Proposed Rule and provide update. In the meantime, it is advisable for banks and financial institutions to start thinking about the strategic and other benefits from submitting public comment and which of their existing service contracts may be subject to the new requirements, so that they are ready to make the necessary alteration and supplementation when the rules are in effect.


[i] Provided that the agreement falls within the Rules applicability date.

[ii] 131 S. Ct. 1740 (2011)

[iii] The financial providers may comply with this requirement by amending the language in their arbitration agreements to include the following language proposed by the CFPB: We agree that neither we nor anyone else who later becomes a party to this pre-dispute arbitration agreement will use it to stop you from being part of a class action case in court. You may file a class action in court or you may be a member of a class action even if you do not file it. Or they may provide consumers a separate notice.

[iv] The proposed rules specifically exclude a number of service providers, including broker-dealers subject to the regulations of the Securities and Exchange Commission, including those promulgated by the Financial Industry Regulatory Authority; State and Federal government agencies; financial service providers with fewer than 25 customers in the current year and the preceding calendar year; and merchants, retailers, and seller of nonfinancial goods or services.

[v] The Rule would apply to pre-dispute agreements for products listed in Section 1040.3(a) to the extent they are consumer financial products or services as defined by 12 USC. 5481(5).

[vi] The CFPBs proposed language is as follows: We are providing you with more than on product or service, only some of which are covered by the Arbitration Agreements Rule issued by the Consumer Financial Protection Bureau. We agree that neither we nor anyone else will use this agreement to stop you being [from] being part of a class action case in court. You may file a class action in court or you may be a member of a class action even if you do not file it. This provision applies only to class action claims concerning products or services covered by that Rule.

[vii] Press Release, Consumer Financial Protection Bureau, CFPB Proposes Prohibiting Mandatory Arbitration Clauses that Deny Groups of Consumers their Day in Court, available at

Biz Briefing

Welcome to the June 20 Monday Business Briefing, your private business intelligence digest from Insider Louisville.

Survey: Employers worry health care mergers will increase costs

Say hello to another powerful opponent of the two proposed health care mergers: corporate America.

Hartford, Conn.-based Aetna wants to buy Louisville-based Humana, while Anthem wants to buy Cigna. The US Department of Justice is investigating whether the mergers would materially reduce competition.

While the companies have said the mergers would cut costs and improve care, organizations including the American Medical Association have raised objections to the deals, saying they would reduce competition and increase consumer prices.

Corporate America, too, does not seem to be buying the insurers’ claim that the mergers would lower prices, according to an article in Modern Healthcare.

“Many large employers won’t be disappointed if officials torpedo the deals,” the article read. “Several surveys of Fortune 500 companies and other big employers reveal nervousness that the reduced competition among health insurers will mean higher healthcare costs for them.”

Modern Healthcare said employers have more of a stake in the Anthem-Cigna deal, which deals more with large employers, than in the Aetna-Humana combo, which provides more services to elderly Americans on government insurance. —Boris Ladwig

See Spot Grooming amp; Daycare growing, looking to franchise nationally

See Spot trains all its employees to groom a variety of animal breeds. | Courtesy of See Spot Grooming amp; Daycare

When I first talked to See Spot Grooming amp; Daycare co-owner Khris Batts two years ago, the company was preparing to open its second location and Batts said she wanted to open five stores by 2022.

While that seemed like an aggressive growth plan at the time, Batts and co-owner William Berry have kicked it up a notch. On June 27 with six years left on their 10-year plan, they will open their fourth store. The new store is their third in Louisville and will be located at 5909 Timber Ridge Drive in Prospect. See Spot’s other stores are in St. Matthews, on Lime Kiln Road and in Bradenton, Fla.

See Spot offers a variety of grooming services, daycare and training for dogs and cats as well as 24-hour daycare at its St. Matthews store. See Spot employs 45 people company-wide.

Batts and Berry already are looking for their second Florida store and fourth Louisville location. They plan to alternate opening new stores between Louisville and Florida.

“The [Florida] market very much duplicates the market here in Louisville in terms of income, population, dog ownership,” Batts said.

In the meantime, they also are talking to potential franchisees.

“We are on the verge of beginning to franchise this,” Batts said. “It’s a matter of who’s going to be the first.”

Before they finalize any franchise agreements, however, they are focusing on opening the Prospect store.

“We really want to be more hands-on with the process,” Berry said. “We want the stores, no matter where they are, to be very uniform. There is a very high standard that we have.”

See Spot has an academy in Louisville where it trains all groomers, and the stores have open floor-plans, allowing customers to see animals being groomed and trained.

“We take a very consultative approach with the customer. We really want to learn what they are looking for,” Berry said. “If you are going to come in and spend your hard-earned money on your little fella or little girl, we are giving you something that you want.”

As it looks to pick up its growth pace, See Spot will undoubtedly exceed its original 10-year plan goals, and it seems on its way to becoming another successful Louisville-based chain.

“There’s a huge appetite in the market for what we do, and the industry itself is really underserved, Batts said. It is a craft.” —Caitlin Bowling

SuperChefs reopening in new location next month

Darnell Ferguson, chef and partner at SuperChefs, posed for a photo one month before his restaurant burned. | Photo by Steve Coomes

The superhero-themed restaurant SuperChefs is rising from the ashes this July 9, according to the restaurant’s Facebook page.

Like any respectable superhero, the breakfast, lunch and dinner restaurant has battled back after a fire destroyed its original St. Matthews home. Although it forced the eatery to close for six months, SuperChefs is preparing to come back stronger than ever.

We have grown since January and can’t wait to show you all whats next, chef and SuperChefs partner Darnell Ferguson said in a post back in April.

During the past six months, Ferguson has been readying the restaurant’s new location at 1702 Bardstown Road, the former home of Strati Wild Italian, but he also got the opportunity to meet one of his real-life heroes.

After celebrity chef Rachel Ray heard his story, she invited him on the show where he met chef Emeril Lagasse, who Ferguson said inspired him to become a chef. Lagasse then brought Ferguson down to New Orleans to show him around his restaurant there and teach him some of the knowledge he’s picked up in his many years.

SuperChefs is hiring line cooks, dishwashers, bartenders, servers and hosts. Those interested can email their rÃsumÃs to This email address is being protected from spambots. You need JavaScript enabled to view it.. —Caitlin Bowling

Housing sales continue to rise in Louisville MSA

Median home prices were up 3.3 percent to $155,000 in the first five months of 2016, and the number of homes sold jumped as well.

As of May 31, the number of houses sold in Louisville’s Metropolitan Statistical Area reached 6,489, up 11.3 percent during the same period last year, according to the Greater Louisville Association of Realtors.

Housing inventory remains low. Active listings on May 15 this year were 23.7 percent lower than on the same date in 2015, with only 4,451 houses listed.

The limited inventory of homes for sale is not just limited to Jefferson County. Bullitt and Oldham County inventory is also down 21 percent and 25 percent respectively, GLAR president Greg Taylor said in a news release. Continued low mortgage rates are keeping affordability intact; however, our members are seeing rising prices in neighborhoods that attract first-time buyers due to the low inventory. —Caitlin Bowling

Magazine heralds Copper amp; Kings’ brandy as up-and-coming drink

Copper amp; Kings, Louisville’s funky little Butchertown distillery, just received some national love from trade magazine Beverage World, which named the company’s brandy line as one of the 10 up-and-coming drinks of the year.

In its annual Breakout Brands issue, editor Jeff Cioletti chatted with distillery co-owner Joe Heron and praised him for carving out a niche in a very underserved segment of the craft spirits industry. When asked about his initial idea to make brandy in the middle of bourbon country, Heron answered: We saw an opportunity to do an authentic American brandy that was defined by an American paradigm using American whiskey as a reference point — and American music and culture, as opposed to some traditional aspiration.

A bottle of Copper amp; Kings brandy also is prominently featured on the magazine’s cover. Cheers! —Sara Havens

Kentucky to the World hosting talk with private businessman Junior Bridgeman

Ulysses Junior Bridgeman | File Photo

Louisville businessman Ulysses Junior Bridgeman, who usually shies away from the limelight, will record an interview about his life and business before a live studio audience later this year.

The event is for a podcast called Breaking the Mold created by Louisville native Evan Roth, managing partner of wealth management firm BBR Partners in New York City. Roth’s brother Daniel Roth, executive editor of LinkedIn, will co-host the podcast episode.

The interview will take place on Aug. 3 on the fourth floor of The Henry Clay Building, 604 S. Third St. The event will begin with a reception with appetizers from Wiltshire Pantry and a cash bar from 5:30 to 6:30 pm, followed by the recording from 6:30 to 8 pm Tickets are $25 and available for purchase here.

Kentucky to the World, an organization that aims to improve the state’s image around the globe, is hosting the event. —Caitlin Bowling

Better Business Bureau: Keep an eye out for these scams, Louisville!

File Photo

The Better Business Bureau serving Louisville, Southern Indiana and Western Kentucky recently released a rundown of scams that trapped local residents, and the organization is cautioning others to beware.

Top of the list is fake Muhammad Ali memorabilia. Although the release doesn’t cite any specific examples, the BBB encourages consumers to think before they buy and make sure they can verify the authenticity of an Ali item.

While some websites or individuals are selling legitimate items like signed paintings, others could try to profit off of his death, the BBB said in the release.

Scams on the rise locally include phony IRS calls that claim a taxpayer owes the government money; people promising loan debt relief services to college students in exchange for a large fee and personal information; and phony calls from someone claiming to represent Publishers Clearing House.

Seniors also have reported receiving calls from people who alleged to be a grandchild and say there were arrested overseas and need money. Other residents have received calls offering fake mystery shopping jobs.

In another instance, a local woman hired a locksmith she found via Google who promised low prices. She was charged triple the quote, stated the BBB, which encourages consumers to check for reputable company’s on its website.

For more information about these scams and others reported to Louisville’s BBB, check here. —Caitlin Bowling

Kindred to build rehab hospital in California

Louisville-based Kindred Healthcare plans to build a 58,528-square-foot, 52-bed rehabilitation hospital near San Diego.

The nursing and rehab hospital company has signed an agreement to create a joint venture with Palomar Health, a governmental health system, which will staff the facility.

Palomar spokesman Chris Saunders told Insider Louisville that he did not know the cost of the project, because no Palomar funds are involved. He said Kindred has secured financing through a third-party contractor and that information about the project’s cost would have to come from Kindred.

Kindred spokeswoman Susan Moss did not reply to an email.

The partners hope to open the hospital on the campus of Palomar Medical Center in Escondido, by the third quarter of 2019.

Saunders said the two-story facility will have a positive impact on the San Diego economy because it will create new jobs within the health system and the community at large. He said Palomar does not yet know the exact number of jobs the facility will require.

Kindred CEO Benjamin Breier said in a press release that “collaborative efforts … have helped our inpatient rehabilitation services business outperform peers in key clinical measures.”

Kindred this year has made significant moves to adjust its portfolio of long-term acute care hospitals, or LTACs.

In April, the company said it had signed an agreement to sell 12 LTACs to a private investment fund. This month, Kindred sold two more LTACs, to Select Medical Holdings Corp., but also bought four LTACs from the same company. Kindred essentially swapped two of its hospitals in Cleveland, with a combined 183 beds, with four SMHC facilities in Houston, Colorado Springs, Denver and Indianapolis, with a combined 189 beds. Kindred also paid the Pennsylvania-based company $800,000. —Boris Ladwig

Microenterprise loans to boost 13 local businesses

The mayor has announced 13 microenterprise loans worth $128,000 to local small businesses. The 13 recipients are all low- to moderate-income entrepreneurs. For a business to be considered a microenterprise, they must employ fewer than five people including the owner.

These loans are revolving loans administered by the city’s Microbusiness Development Program, which is dedicated to helping small businesses find success in Louisville.

“We know that every one dollar in program costs generates five dollars in benefits for our microbusiness owners. And that helps our families, our neighborhoods, and our whole city,” Mayor Greg Fischer said in a press release. “These results prove that our investment in this program, and other programs like this truly make significant, even, life-changing impacts in the lives of those we serve.”

The loans were:

  • $15,000 loan to Manhattan on Broadway, 716 East Broadway. The loan will allow the owner, Nachand Trabue, to purchase more inventory, sound and video equipment. This project will add two full-time positions.
  • $15,000 loan to George Addison, doing business as BeeNetworks Media Group, which specializes in marketing and media video productions. This will allow the owner to purchase supplies and inventory.
  • $15,000 loan to Romanique Beauty Salon, 5201 Dixie Highway. The loan will allow the owner, Janisha Ditto, to buy production equipment, signage and marketing materials.
  • $15,000 loan to Future Pioneer Learning Center, 7731 St. Andrews Church Road. This will allow the owner, Roshunder Gordon, to purchase childcare equipment, insurance and signage for an expanded facility. This project will add four part-time positions.
  • $15,000 loan to Doaty Distribution LLC to purchase box trucks. The loan will help the owner, James Doaty, expand routes to five other locations for deliveries of snacks.
  • $15,000 loan to Wright Amount located in Chef Space, 1800 West Muhammad Ali Blvd.  This will allow the owner, Tracy Wright, to purchase inventory, rental space and food trailer.
  • $8,000 loan to All is Fair in Love and Fashion to buy inventory and equipment. The loan will help the owner, RaeShanda Johnson, expand production services.
  • $5,000 loan to Extreme Appetite LLC. This will allow the owner, Damira Trabue, to provide mobile food catering services.
  • $5,000 loan to The Black Italian, a food catering service. This loan will allow the owners, Paula and Anthony Hunter, to purchase inventory, space and a vehicle and support transportation for customers.
  • $5,000 loan to Jace’s Childcare, 4107 Cane Run Road. This loan will assist owner Keishonda Clark in buying some new equipment, and rental assistance.
  • $5,000 loan to Queens Crown Lunchbox and Catering. The loan will allow the owner, Katrina Dawson, to purchase a stove and inventory to operate business.
  • $5,000 loan to Garry Sloan, doing business as GT Transportation LLC. The loan will help purchase office furniture, printing equipment and supplies.
  • $5,000 loan to Rebecca Jones, doing business as Genesis Tax Service, a startup tax service. The loan will allow the owner to pay for tax software and equipment. Melissa Chipman

Southern Indiana tourism bureau seeking artists to celebrate ‘Bison-Tennial’

The painted bisons will be on display in Indiana’s 92 counties. | Courtesy of Indiana Association of United Ways

The Clark-Floyd Counties Convention amp; Tourism Bureau is accepting proposals from regional artists for a project celebrating the state of Indiana’s bicentennial.

The bureau received a 5-foot fiberglass bison from the Indiana Association of United Ways, which is facilitating a statewide project where each of Indiana’s 92 counties will display one painted bison. Think the horses around Louisville.

The local CTB plans to place the bison outside its offices at 315 Southern Indiana Ave. in Jeffersonville and is looking for artists to submit possible designs that include authentic visitor experiences available in Clark and Floyd Counties.

Artists must submit their proposals to the CTB office by noon on Friday, June 24. Finalists will be announced after two weeks and take part in follow-up interviews.

One requirement of the project is that children be involved. For more information, email CTB executive director Jim Epperson at —Caitlin Bowling

Brown-Forman to host annual meeting July 28

Brown-Forman Corp. will host its annual shareholder meeting at 9:30 am July 28 at its conference center at 850 Dixie Highway in Louisville.

Those who wish to attend the meeting should register before July 27 by contacting Stockholder Services Manager Linda Gering at 502-774-7690 or This email address is being protected from spambots. You need JavaScript enabled to view it.. Attendees must bring a photo ID.

Those whose shares are registered in the name of a bank, broker or other holder of record must bring documentation of stock ownership as of June 20. Both holders of Class A or Class B shares may attend, though only those who hold Class A stock may vote. Those who wish to vote by proxy can call 800-652-8683 or click here.

The meeting agenda includes such items as electing directors to the board and voting on a proposal to double the number of Class A shares, a move related to the previously announced 2-for-1 stock split. —Boris Ladwig