March 6, 2002
First Freedom Financial

FOR IMMEDIATE RELEASE

    Columbia—Helen Fennell, Chief Enforcement Attorney at the South Carolina Department of Consumer Affairs, is pleased to announce that a consent settlement order has been signed by The Honorable Danny Pieper, Judge of the Ninth Judicial Circuit. First Freedom Financial Corporation and company founder, Thomas Gregg Holloway, have agreed to settle the Department’s civil action against them regarding illegal loan brokering. State law prohibits loan brokers from collecting up-front or advance fees when arranging, assisting or offering to fund a loan, line of credit or credit card. It is also a violation of the Federal Telemarketing Act.

    Fennell said, "In this case, First Freedom Financial misrepresented the type of products and/or services the consumer was to receive. Consumers were told that for an initial up-front "application fee" they would receive a "First Freedom Gold Card" or "First Freedom Platinum Plus Card." The cards were misrepresented as credit cards such as a Visa or MasterCard when in fact they were merely secured catalogue sales cards."

    An application for a MasterCard might also be included in the package the consumer was sent, but the consumer might still be turned down for that offer, and if accepted, the MasterCard required the consumer to pay hefty fees to procure a card that was also a secured card. That is -- one that required the consumer to deposit money prior to using the card. In order to induce the consumer to accept the original offer, First Freedom or Telmark Consumer Services, as they were also known, offered ‘free gifts’ that ultimately were not free since the gifts or services required deposits, down payments, or service contracts.

   She also stated that chief among consumer complaints received by the Department was that consumers did not understand that by providing their bank account number, money would be deducted from their checking accounts for the application and processing fee. Solicitations for these "credit offers" usually came by post card, but also appeared in magazines and on cable television. Unfortunately, advertising in recognized media outlets does not guarantee the legitimacy of the company behind the ad.

    Fennell reminds consumers not to confuse legitimate pre-approved credit offers and pre-qualified offers from mortgage brokers, banks, savings and loans, and credit unions with an offer that requires the consumer to pay an advance fee to receive it. A pre-approved offer requires only your verbal or written acceptance. A pre-qualified offer means you’ve been selected to apply. However, you still must go through the normal application process, and you still can be turned down.

    Consumers are encouraged to never ever give their bank, checking account, or social security number to an unknown person over the phone. There are few exceptions to this rule.

    Finally, Fennell stated that Holloway and his current businesses or affiliates, including First Freedom Financial, Southern Telmark, Telmark Consumer Services, Prime National Holding Corporation and Customer Services, Inc. have agreed to leave the state and not operate or solicit consumers in South Carolina again. Holloway also agreed to pay a settlement fee of fifty thousand dollars ($50,000) as part of the settlement.

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