The office of Colorado Attorney General John Suthers has filed a lawsuit against Real Talk Network, and its corporate officers, David Allen Burke and Erik Sale, on suspicion that they engaged in false and deceptive trade practices and violated Colorado's consumer credit laws.
"The down economy has left many consumers looking for a way to get out of debt," Suthers said. "The defendants in this case are suspected of using deceptive sales pitches to bilk consumers out of thousands of dollars for services they ultimately never received. At its core, this scam preyed on consumers' desires for a silver bullet to get out of debt."
According to the complaint, Real Talk Network ran infomercials on talk radio stations in Colorado and California. During the infomercials, Real Talk Network and its officers are suspected of telling consumers that they can get out of debt in short period of time, pay off their mortgages in less than 10 years and "explode" their credit scores by following the company's program.
The company also is suspected of advertising a 100 percent success rate for participants. According to the complaint, consumers are advised to attend a "free" three-hour seminar to learn more about the company's program.
Real Talk Network and its officers allegedly told consumers at the seminars that they will be able to work with the company to:
develop an individualize debt-reduction plan through one-on-one coaching with a trained financial adviser;
remove negative information from their credit reports and "explode" their credit scores; and,
obtain no-interest credit and low-interest loans though the special relationships Real Talk Network has with banks.
At the end of the "free" seminar, according to the lawsuit, Real Talk Network representatives pressured consumers to sign up for their services and to pay from $1,497 to $3,497. According to the complaint, consumers who pay the fee or sign up for a monthly payment plan report receiving little to no assistance from financial advisers who have no financial training or experience. Real Talk Network's purported "special relationships" with various banks did not exist.
Burke also is suspected of misrepresenting his credentials and not disclosing information about his financial history that might have changed consumers' minds about the seminars. For example, he misled consumers to believe he was a graduate of the University of Southern California and did not disclose that he had filed for bankruptcy in 2000 and 2007.
Consumers who quit the program or declined to pay once they became aware of the lack of services Real Talk Network provided had their accounts handed off to a collection agency.
"Although we and our partners warn that Colorado consumers should always beware deals that sound too good to be true, companies should not prey on consumers' desperation or fears after going into debt or falling behind on their bills," Suthers said. "This case underlines my office's commitment to ensuring that businesses operate on a level playing field and do not victimize consumers."
Consumers who believe they have been defrauded by a business can file a complaint online with the Office of the Attorney General, or call 1-800-222-4444.