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FTC escalates anti-robocall campaign – takes out 5 mass callers

FTC cases follow agency’s Robocall Challenge offering $50,000 for private high-tech fix for robocall problem

By Layer 8 on Thu, 11/01/12 - 12:30pm.

ftcJust two weeks after it challenged the public to come up with a better technological way to stop incessant robocalling, the Federal Trade Commission pulled the plug on  five mass calling companies it said were allegedly responsible for millions of illegal pre-recorded calls from "Rachel" and others from "Cardholder Services."    

The FTC said it gets more than 200,000 complaints each month about telemarketing robocalls, including calls from "Rachel" that pitch consumers with a supposedly easy way to save money by reducing their credit card interest rates.  After collecting an up-front fee, however, the FTC believes that the companies do little if anything to fulfill their promises.

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"At the FTC, Rachel from Cardholder Services is public enemy number one," said FTC Chairman Jon Leibowitz at the announcement of the cases. 

The five complaints announced today were filed in courts from Arizona to Florida against the following companies: 1) Treasure Your Success, 2) Ambrosia Web Design, 3) A+ Financial Center, LLC, 4) The Green Savers, and 5) Key One Solutions, LLC.  Each complaint alleges, among other things, that the defendants violated the FTC Act by misrepresenting that consumers who buy their services will have their credit card interest rates reduced substantially and  will save thousands of dollars as a result of lowered credit card interest rates.

In the cases, the FTC alleges that the defendants place automated calls to consumers, saying they have an "important message" regarding an opportunity to reduce high credit card interest rates.  Consumers are urged to "press 1" to connect with a live representative, or "press 2" to discontinue getting such calls.  Consumers who press 1 are connected to live telemarketers.  Most consumers have no way to screen the calls using Caller ID, as the incoming number allegedly is often "spoofed," or displayed as a false number.  In many cases, the name displayed on the Caller ID is so generic, such as "Card Services," that it provides little information about who is calling, the FTC stated.

According to the FTC, consumers who reach a live telemarketer are then pitched allegedly deceptive offers to have their credit card interest rates substantially reduced, sometimes to as low as 6.9 or even zero percent.  The telemarketers allegedly guarantee that lowering card interest rates will save the consumers thousands of dollars in finance charges in a short period of time and will allow them to pay off the balances more quickly.  Some telemarketers allegedly claim that consumers will save at least $2,500 in finance charges and will be able to pay off their balances two to three times faster, without increasing their monthly payments.