A federal court has halted and frozen the assets of a nationwide debt relief telemarketing scam that allegedly stole millions of dollars from consumers, pending resolution of allegations made by the Federal Trade Commission and the state of Florida.
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The alleged scammers, who used a variety of phony business names with associated websites, cold-called consumers with credit card debt and falsely promised that, for an upfront fee of, on average, between $695 and $1,495, they would save them thousands of dollars by reducing their credit card interest rate. The defendants also allegedly falsely promised to refund consumers money if they failed.
The telemarketers identified themselves as "card services," "credit services" and "card member services," or one of the defendants phony businesses, according to the complaint. To win consumers' trust, they said they knew the amount of their credit card debt, provided the callers license or badge number, mentioned the Internet domain name of the phony business, and falsely claimed they had a business relationship with consumers lenders. During the call, the defendants billed consumers credit cards between $500 and $1500 and promised a specific reduced interest rate and savings amount, such as 6% or lower and $5,000 within 90 days.
The consumers didnt receive the promised results or refunds, the FTC and Florida officials alleged. In fact, most credit card issuers don't negotiate interest rates or discuss consumers accounts with third parties, the complaint noted.
The defendants allegedly violated the FTC Act, the FTCs Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act. The complaint noted that Short and Dyar participated in a similar scam,
