FTC shuts down “card member services” robocallers

FTC continues robocall battle;FCC robocall help may be on the way


A massive robocall campaign designed to trick people into paying for worthless credit card interest rate reduction programs has been shut down by a Federal Court at the behest of the Federal Trade Commission and the Florida Attorney General.

The court order stops the illegal calls, many of which targeted seniors and claimed to be from “credit card services” and “card member services.” The defendants charged consumers up to $4,999 for their non-existent services, the FTC stated.

+More on Network World: FBI: Social media, virtual currency hit big time scam, fraud club+

“These scammers were making illegal robocalls to people nationwide, some of whom were seniors on fixed incomes. Too often the services promised were never provided, and consumers faced even more credit card debt through charges made without their consent,” said Florida Attorney General Pam Bondi.

The FTC said the company, Payless Solutions, has been illegally calling thousands of consumers nationwide claiming that their program will save them at least $2,500 in a short period of time and will enable them to pay off their debts more quickly. After convincing consumers to provide their credit card information, the defendants then charged between $300 and $4,999 up-front for their worthless service. In some cases, they illegally charged consumers without their consent.

+More on Network World: FBI and IRS warn of pervasive, maddening business, consumer scams+

The joint agency complaint alleges that the defendants fail to provide consumers with the promised interest rate reductions or savings. Instead, some consumers receive a package of financial education information that they did not request or agree to pay for. In other cases, the defendants use consumers’ personal information to apply for new credit cards, presumably with low introductory interest rates, without consumers’ knowledge or consent, the FTC stated.

The case is just one of many the FTC has taken against robocallers who despite regulations continue to aggravate anyone with a phone.

Earlier this year the FTC and10 state attorneys general today said they have settled charges against a Florida-based cruise line company and seven other companies that averaged 12 million to 15 million illegal sales calls a day between October 2011 through July 2012, according to the joint complaint filed by the FTC and the states.

Consumers who answered these calls typically heard a pre-recorded message supposedly from “John from Political Opinions of America,” who told them they had been “carefully selected” to participate in a 30-second research survey, after which they could “press one” to receive a two-day cruise to the Bahamas. Once consumers completed the survey and pressed one for their cruise were connected to a live telemarketer working on behalf of Caribbean Cruise Line, Inc. (CCL), to market its cruise vacation packages, the FTC said.

The rat in the ointment here is that while the FTC’s do-not-call and robocall rules do not prohibit political survey robocalls, the defendants’ robocalls violated federal law because they incorporated a sales pitch for a cruise to the Bahamas. The robocalls generated millions of dollars for the cruise line, the FTC said.

While the scourge continues, the Federal Communications Commission recently adopted a proposal to protect consumers against unwanted robocalls and spam texts that may help.   The main ruling that could provide some relief is that service providers can legally offer robocall-blocking technologies to consumers and implement other technologies that could stop unwanted robocalls.

FCC Chairman Tom Wheeler said the FCC wants to “close loopholes and strengthen consumer protections already on the books,” such as the widely used Do-Not-Call Registry. The FCC proposals were in response to industry players who sought clarity on how the Commission enforces the Telephone Consumer Protection Act (TCPA).

"The FCC wants to make it clear: Telephone companies can – and in fact should – offer consumers robocall-blocking tools," FCC Chairman Tom Wheeler said in a blog post in mid-June. In the past some carriers we concerned that blocking automated calls could be construed as violations of the TCPA that requires them to ensure that all calls placed over their networks reach their intended recipients.

The Consumers Union, which launched a national campaign to stop robocalls (Endrobocalls.org) said that more than 320,000 consumers have signed its petition calling on the top phone carriers to offer their customers free, effective call-blocking tools.

Check out these other hot stories:

FBI: CryptoWall ransomware plague rising

Air Force cybersecurity scheme aims to deceive and survive

NASA: “Wild” technology will transform aviation

SpaceX wants you to build Elon Musk’s Hyperloop pod

IRS unites tax industry to try to stem flood of fraud, identity theft

NTSB wants auto industry to speed collision avoidance technology adoption

DARPA spends $24M to smarten-up WAN edge

Must read: Hidden Cause of Slow Internet and how to fix it
View Comments
Join the discussion
Be the first to comment on this article. Our Commenting Policies