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Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 1 of 28UNITED STATES DISTRICT COURTDISTRICT OF NEVADA1234Plaintiff,56789Case No. 2:21-cv-154FEDERAL TRADE COMMISSION,v.SEED CONSULTING, LLC, also doingbusiness as SEED CAPITAL andFOUNDATION FUNDING, a Nevadalimited liability company,[PROPOSED] STIPULATEDORDER FOR PERMANENTINJUNCTION ANDMONETARY JUDGMENT1011CREDIT NAVIGATOR, LLC, a Nevadalimited liability company,1215ERIK GANTZ, individually, and as aprincipal and owner of SEEDCONSULTING, LLC and CREDITNAVIGATOR, LLC, and16RANDY LANG, individually,1314171819Defendants.Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its20Complaint for Permanent Injunction and Monetary Judgment in this matter21(“Complaint”), for a permanent injunction and other equitable relief in this matter,22pursuant to Sections 13(b) and 19 and of the Federal Trade Commission Act (“FTC23Act”), 15 U.S.C. §§ 53(b) and 57b, Section 6(b) of the Telemarketing and24Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C.25§ 6105, Section 410(b) of the Credit Repair Organizations Act (“CROA”), 1526U.S.C. § 1679h, and Section 2(d) of the Consumer Review Fairness Act of 201627(“CRFA”), 15 U.S.C. § 45b. The Commission and Defendants Seed Consulting,28LLC, Credit Navigator, LLC, Erik Gantz, and Randy Lang stipulate to the entry of1
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 2 of 281this [Proposed] Stipulated Order for Permanent Injunction and Monetary Judgment2(“Order”) to resolve all matters in dispute in this action between them.3THEREFORE, IT IS ORDERED as follows:FINDINGS451.This Court has jurisdiction over this matter.62.The Complaint charges that Defendants participated in deceptive and7unfair acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C.8§ 45(a), Section 310.3(b) of the FTC’s Trade Regulation Rule entitled9Telemarketing Sales Rule (“TSR”), 16 C.F.R. § 310.3(b), Section 404 of CROA,1015 U.S.C. § 1679b, and Section 2(c) of the CRFA, 15 U.S.C. § 45b, in connection11with their business of applying for and obtaining credit cards on behalf of12consumers in exchange for a fee.133.Defendants neither admit nor deny any of the allegations in the14Complaint, except as specifically stated in this Order. Only for purposes of this15action, Defendants admit the facts necessary to establish jurisdiction.164.Defendants waive any claim that they may have under the Equal17Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action18through the date of this Order, and agree to bear their own costs and attorney fees.19205.Defendants and the Commission waive all rights to appeal orotherwise challenge or contest the validity of this Order.DEFINITIONS2122For the purpose of this Order, the following definitions apply:23A.“Clearly and Conspicuously” means that a required disclosure is24difficult to miss (i.e., easily noticeable) and easily understandable by ordinary25consumers, including in all of the following ways:261.In any communication that is solely visual or solely audible, the27disclosure must be made through the same means through which the28communication is presented. In any communication made through both visual and2
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 3 of 281audible means, such as a television advertisement, the disclosure must be presented2simultaneously in both the visual and audible portions of the communication even3if the representation requiring the disclosure is made in only one means.2.4A visual disclosure, by its size, contrast, location, the length of5time it appears, and other characteristics, must stand out from any accompanying6text or other visual elements so that it is easily noticed, read, and understood.3.7An audible disclosure, including by telephone or streaming8video, must be delivered in a volume, speed, and cadence sufficient for ordinary9consumers to easily hear and understand it.4.1011In any communication using an interactive electronic medium,such as the Internet or software, the disclosure must be unavoidable.5.12The disclosure must use diction and syntax understandable to13ordinary consumers and must appear in each language in which the representation14that requires the disclosure appears.6.15The disclosure must comply with these requirements in each16medium through which it is received, including all electronic devices and face-to-17face communications.7.1819The disclosure must not be contradicted or mitigated by, orinconsistent with, anything else in the communication.8.20When the representation or sales practice targets a specific21audience, such as children, the elderly, or the terminally ill, “ordinary consumers”22includes reasonable members of that group.232425B.“Consumer Credit” means credit advanced to a consumer for thepurchase of goods or services, including by a credit card.C.“Consumer Credit Service” means an arrangement where a Person26assists a consumer in applying for or obtaining Consumer Credit in exchange for a27fee or other financial compensation. Consumer Credit Service does not include28mortgage brokerage services.3
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 4 of 281D.“Consumer Financial Account Information” means any2information that is identified with a consumer concerning a financial account,3including account numbers, credit card account balances or limits, depository bank4account balances, mortgage or automobile balances, or any other financial account5balance or limit.6E.“Corporate Defendants” means Seed Consulting, LLC (also doing7business as Seed Capital and Foundation Funding) and Credit Navigator, LLC, and8each of their subsidiaries, affiliates, successors, and assigns.9F.“Covered Communication” means a written, oral, or Pictorial10review, performance assessment, or other similar analysis of goods or services,11including conduct related to the goods or services.12G.“Credit Repair Service” means any service, in return for payment of13money or other consideration, for the express or implied purpose of: (1) improving14any consumer’s credit report, credit record, credit history, credit profile, credit15score, or credit rating; or (2) providing advice or assistance to any consumer with16regard to any activity or service the purpose of which is to improve any17consumer’s credit report, credit record, credit history, credit profile, credit score, or18credit rating.1920H.“Defendants” means the Individual Defendants and the CorporateDefendants, individually, collectively, or in any combination.21I.“Including” means including but not limited to.22J.“Individual Defendants” means Erik Gantz and Randy Lang.23K.“Person” means any natural person, organization, or legal entity,24including a corporation, limited liability company, partnership, proprietorship,25association, cooperative, government or governmental subdivision or agency, or26any other group or combination acting as an entity.27L.28symbols.“Pictorial” includes pictures, photographs, video, illustrations, and4
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 5 of 281M.2term that:1.34prohibits or restricts the ability of a Person who is a party to thecontract to engage in a Covered Communication;2.56“Review-Limiting Contract Term” means a standardized contractimposes a penalty or fee against a Person who is a party to thecontract for engaging in a Covered Communication; or3.7transfers, or requires a Person who is a party to the contract to8transfer, to any other Person any intellectual property rights in a Covered9Communication, with the exception of a non-exclusive license to lawfully use a10Covered Communication about a Defendant’s goods, services, or conduct.11I.12BAN ON SELLING CONSUMER CREDIT SERVICES13IT IS ORDERED that Defendants are permanently restrained and enjoined14from advertising, marketing, promoting, or offering for sale, or assisting in the15advertising, marketing, promoting, or offering for sale of, any Consumer Credit16Service.17II.18PROHIBITED BUSINESS ACTIVITIES19IT IS FURTHER ORDERED that Defendants, Defendants’ officers,20agents, employees, and attorneys, and all other Persons in active concert or21participation with any of them, who receive actual notice of this Order, whether22acting directly or indirectly, in connection with the advertising, marketing,23promotion, or offering for sale of any good or service, other than those banned by24Section I of this Order, are permanently restrained and enjoined from:25A.Misrepresenting, or assisting others in misrepresenting, expressly or26by implication:27285
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 6 of 2811.The financial status of any customer, including the customer’s2income or assets, in connection with any submission to a financial institution or3credit bureau;4567891011122.That consumers are likely to earn substantial income, or aspecific level or range of actual or potential income;3.The impact of any service provided by Defendants on aconsumer’s credit record, credit history, or credit rating;4.The extent to which and the manner in which Defendants willuse, transfer, share, or disclose Consumer Financial Account Information;5.Any Person’s ability to improve or otherwise affect aconsumer’s credit record, credit history, or credit rating or ability to obtain credit;6.That any Person can improve any consumer’s credit record,13credit history, or credit rating by permanently removing negative information from14the consumer’s credit record, credit history, or credit rating, even where such15information is accurate and not obsolete;167.The terms or rates that are available for any loan or other17extension of credit, including, but not limited to: (a) the type of credit (such as a18credit card, line of credit, or loan); (b) closing costs or other fees and how such19costs or fees will be assessed; (c) the payment schedule, monthly payment20amount(s), any balloon payment, or other payment terms; (d) the interest rate(s),21annual percentage rate(s), or finance charge(s), and whether they are fixed or22adjustable; (e) the loan amount, credit amount, draw amount, or outstanding23balance; the loan term, draw period, or maturity; or any other term of credit; (f) the24amount of cash to be disbursed to the borrower out of the proceeds, or the amount25of cash to be disbursed on behalf of the borrower to any third parties; (g) whether26any specified minimum payment amount covers both interest and principal, and27whether the credit has or can result in negative amortization; or (h) that the credit286
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 7 of 281does not have a prepayment penalty or whether subsequent refinancing may trigger2a prepayment penalty and/or other fees; or8.3Any other fact material to consumers concerning any good or4service, such as: the total costs; any material restrictions, limitations, or5conditions; or any material aspect of its performance, efficacy, nature, or central6characteristics; and7B.Failing to disclose Clearly and Conspicuously, in connection with any8representation regarding the availability of any loan or other extension of credit:9(1) the type of credit (such as a credit card, line of credit, or loan); (2) all costs10associated with such extension of credit and how such costs shall be assessed;11(3) the interest rate(s), annual percentage rate(s), or finance charge(s), and whether12they are fixed or adjustable; and (4) the loan amount, credit amount or limit, draw13amount, or outstanding balance.14III.15PROHIBITIONS REGARDING CREDIT REPAIR SERVICES16IT IS FURTHER ORDERED that Defendants, Defendants’ officers,17agents, employees, and attorneys, and all other Persons in active concert or18participation with any of them, who receive actual notice of this Order, whether19acting directly or indirectly, in connection with the advertising, marketing,20promotion, or offering for sale of any Credit Repair Service, other than those21banned by Section I of this Order, are permanently restrained and enjoined from:22A.Engaging in any act, practice, or course of business that constitutes or23results in the commission of, or an attempt to commit, a fraud or deception on any24Person in connection with the offer or sale of a Credit Repair Service;25B.Making any statement or advising any consumer to make any26statement, which is untrue or misleading or should be known to be untrue or27misleading, with respect to any consumer’s credit worthiness, credit standing, or28credit capacity to: (A) any consumer reporting agency (as defined in section 157
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 8 of 281U.S.C. § 1681a(f)); or (B) any person— (i) who has extended credit to the2consumer; or (ii) to whom the consumer has applied or is applying for an extension3of credit;4C.Failing to provide any Person with a written statement of “Consumer5Credit File Rights Under State and Federal Law,” in the form and manner required6by Section 405(a) of CROA, 15 U.S.C. § 1679c(a);7D.Failing to include in contracts for any Credit Repair Service a8conspicuous statement in bold face type, in immediate proximity to the space9reserved for the consumer’s signature on the contract, regarding the consumer’s10right to cancel the contracts without penalty or obligation at any time before the11third business day after the date on which consumers signed the contracts, in the12form and manner required by Section 406(b)(4) of CROA, 15 U.S.C.13§ 1679d(b)(4);14E.Failing to provide any Person with a separate form with the heading15“Notice of Cancellation,” in the form and manner required by Section 407(b) of16CROA, 15 U.S.C. § 1679e(b);17F.Charging or receiving any money or other consideration for the18performance of any Credit Repair Service before such Credit Repair Service is19fully performed; or2021G.Violating CROA, 15 U.S.C. §§ 1679-1679j, a copy of which isattached as Attachment A.22IV.23PROHIBITION AGAINST DISCLOSURE OF CONSUMER24FINANCIAL ACCOUNT INFORMATION25IT IS FURTHER ORDERED that Defendants, Defendants’ officers,26agents, and employees, and all other Persons in active concert or participation with27any of them who receive actual notice of this Order, whether acting directly or28indirectly, are permanently restrained and enjoined from selling, transferring, or8
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 9 of 281disclosing any consumer’s Consumer Financial Account Information without the2consumer’s express informed consent to the sale, transfer, or disclosure.3V.4PROHIBITION AGAINST ASSISTING AND FACILITATING5IT IS FURTHER ORDERED that Defendants, Defendants’ officers,6agents, and employees, and all other Persons in active concert or participation with7any of them who receive actual notice of this Order, whether acting directly or8indirectly, are permanently restrained and enjoined from providing substantial9assistance or support to any Person that they know, or should know, is engaged in:1011121314151617A.Misrepresenting, directly or by implication, any material aspect of theperformance, efficacy, nature, or central characteristics of any goods and services;B.Misrepresenting, directly or by implication, any material aspect of thenature or terms of any refund, cancellation, exchange, or repurchase policies;C.The unauthorized debiting or charging of consumer bank or creditcard accounts; orD.Any deceptive, unfair, or abusive act or practice prohibited by Section5 of the FTC Act or by the TSR.18VI.19PROHIBITED USE OF REVIEW-LIMITING CONTRACT TERMS20IT IS FURTHER ORDERED that Defendants, Defendants’ officers,21agents, and employees, and all other Persons in active concert or participation with22any of them, who receive actual notice of this Order, whether acting directly or23indirectly, in connection with the sale of any good or service, must not:242526A.Offer to any prospective customer a contract, or offer to any customera renewal contract, that includes a Review-Limiting Contract Term;B.Require that a customer accept a Review-Limiting Contract Term as a27condition of Defendants’ fulfillment of its obligations under a customer contract28that Defendants entered into before the effective date of this Order; or9
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 10 of 281C.Attempt to enforce or assert the validity of any Review-Limiting2Contract Term in any customer contract that Defendants entered into before the3effective date of this Order.4Nothing in this Paragraph shall require Defendants to publish or host the5content provided by any Person, affect any other legal duty of a party to a contract,6or affect any cause of action arising from the breach of such duty.7VII.8MONETARY JUDGMENT910IT IS FURTHER ORDERED that:A.Judgment in the amount of Two Million One Hundred Thousand11Dollars ( 2,100,000) is entered in favor of the Commission against Defendants,12jointly and severally, as equitable monetary relief.13B.Defendants are ordered to pay to the Commission Two Million One14Hundred Thousand Dollars ( 2,100,000), which, as Defendants stipulate, their15undersigned counsel holds in escrow for no purpose other than payment to the16Commission. Such payment must be made within 7 days of entry of this Order by17electronic fund transfer in accordance with instructions previously provided by a18representative of the Commission.19C.Defendants relinquish dominion and all legal and equitable right, title,20and interest in all assets transferred pursuant to this Order and may not seek the21return of any assets.22D.The facts alleged in the Complaint will be taken as true, without23further proof, in any subsequent civil litigation by or on behalf of the Commission,24in a proceeding to enforce its rights to any payment or monetary judgment pursuant25to this Order, such as a nondischargeability complaint in any bankruptcy case.2627E.The facts alleged in the Complaint establish all elements necessary tosustain an action by the Commission pursuant to Section 523(a)(2)(A) of the2810
Case 2:21-cv-00154 Document 2-1 Filed 01/29/21 Page 11 of 281Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral2estoppel effect for such purposes.3F.Defendants acknowledge that their Taxpayer Identification Numbers4(Social Security Numbers or Employer Identification Numbers), which Defendants5must submit to the Commission, may be used for collecting and reporting on any6delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.7G.All money paid to the Commission pursuant to this Order may be8deposited into a fund administered by the Commission or its designee to be used9for equitable relief, including consumer redress and any attendant expenses for the10administration of any redress fund. If a representative of the Commission decides11that direct redress to consumers is wholly or partially impracticable or money12remains after redress is completed, the Commission may apply any remaining13money for such other equitable relief (including consumer information remedies)14as it determines to be reasonably related to Defendants’ practices alleged in the15Complaint. Any money not used for such equitable relief is to be deposited to the16U.S. Treasury as disgorgement. Defendants have no right to challenge any actions17the Commission or its representatives may take pursuant to this Subsection.18VIII.19CUSTOMER INFORMATION20IT IS FURTHER ORDERED that Defendants and Defendants’ officers,21agents, and employees, and all other Persons in active concert or participation with22any of them, who receive actual notice of this Order, whether acting directly or23indirectly, are hereby permanently restrained and enjoined from directly or24indirectly:25A.Failing to provide sufficient customer information to enable the26Commission to efficiently administer consumer redress. If a representative of the27Commission requests in writing any information related to redress, Defendants28must provide it, in the form prescribed by the
business as Seed Capital and Foundation Funding) and Credit Navigator, LLC, and each of their subsidiaries, affiliates, successors, and assigns. F. “Covered Communication” means a written, oral, or Pictorial review, performance assessment, or other similar analysis of goods or service
