The Federal Trade Commission is mailing 10,387 checks totaling more than $969,000 to consumers who lost money in a credit card interest rate reduction scam.

The FTC sued Innovative Wealth Builders (IWB), a telemarketing operation, in January 2013, alleging that since at least 2009 the company cold-called consumers with credit card debt and pitched them a deceptive credit card interest rate reduction program. 

IWB charged consumers between $500 and $2,000 with the promise that all fees would be returned to consumers if IWB failed to meet its promises. IWB’s telemarketers, according to the complaint, claimed IWB could substantially reduce the interest rates of consumers’ credit cards, save consumers thousands of dollars and help them pay off their debts much faster. 

Consumers who receive the checks from the FTC’s refund administrator, Analytics LLC, should deposit or cash them within 60 days of the mailing date. The average amount of each check will be about $92.

According to the FTC's complaint, IWB sent some consumers a so-called "financial plan" that included nothing more than a comparison between: 1) the total amount consumers would pay on their debts if they only paid the minimum monthly amount and; 2) the total amount consumers would pay on their debts if they paid some amount greater than their monthly minimum payment.  

IWB allegedly refused to return consumers’ money. Consumers were often further injured by subsequent unauthorized charges that IWB made to consumers’ credit card accounts, according to the complaint.

It further alleged that the defendants violated the FTC Act by misrepresenting their credit card interest rate reduction services, misrepresenting its refund policy and billing consumers without their authorization. The complaint stated also that the defendants violated the FTC’s Telemarketing Sales Rule, including by misrepresenting the debt relief service they were selling, charging a fee before providing debt relief services and billing consumers without their express informed consent.

In June 2013, an amended FTC complaint filed in federal court alleged that a payment processing company, Independent Resources Network Corp. (IRN), knew key facts about the illegal conduct of IWB but chose to continue profiting from processing IWB’s credit card transactions.

Among the indicators of illegal conduct that IRN allegedly ignored were IWB’s "alarmingly high chargebacks rates," the complaint stated.

A chargeback occurs when a consumer disputes a charge to a credit card and the charge is reversed. The average chargeback rate in the U.S. is well below 1%, meaning fewer than one out of every 100 credit card transactions is reversed as a result of a chargeback. IWB’s chargeback rate averaged above 20% for several years, and exceeded 40% in multiple months. 

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