A federal judge has put a stop to three companies’ allegedly deceptive telemarketing calls, including robocalls, that promised to reduce consumers’ credit card interest rates.
U.S. District Judge Lonny Suko issued an order freezing the companies' assets, while appointing two receivers to take over the businesses. The companies are Advanced Management Services NW LLC, doing business as AMS Financial, based in Spokane, Wash.; Rapid Reduction Systems LLC, and principals Ryan Bishop and Michael Rohlf, also based in Spokane, Wash.; and PDM International Inc., doing business as Priority Direct Marketing International Inc., based in Bedford, Texas.
According to a complaint by the Federal Trade Commission, over the past two years, the defendants made or authorized calls to consumers nationwide, claiming that they could negotiate with credit card issuers to substantially lower the interest rates on the consumers’ credit cards. They allegedly delivered prerecorded "robocalls" that consisted of urgent-sounding messages from "Card Services" or "Financial Services," stating that consumers needed to speak with a representative about their credit card interest rates. Many consumers believed the calls were from their credit card issuers.
Consumers who signed up for the defendants’ services were charged from $499 to $1,590 upfront and promised their money back if the callers failed to deliver at least $2,500 in interest rate savings, the FTC alleged. Instead of arranging reduced interest rates, the complaint states, the defendants sent consumers instructions to pay down their credit card debts early, thus saving money on interest. Consumers who complained and demanded refunds allegedly were denied outright, or had a $199 "nonrefundable fee" deducted from their refund.
“The last thing debt-ridden consumers need is to be deluged by illegal robocalls, especially when all the calls are offering is a scam,” FTC Chairman Jon Leibowitz said in a statement.
The FTC’s complaint alleged that the companies and their owners violated the FTC Act and the Do Not Call and other provisions of the Telemarketing Sales Rule by: deceptively promising consumers they could reduce their credit card interest rates; misleading consumers about their refund policies; illegally calling numbers on the National Do Not Call Registry; failing to honor consumers’ requests not to be called again; and making pre-recorded telemarketing calls to consumers without their express written consent. Nearly all such calls have been illegal since September 1, 2009, according to the FTC.
