The Federal Trade Commission said it has shut down a “robo-calling” operation that sold phony debit relief services, including claims of significantly lowering credit card interest rates for $995.
The FTC settled charges that the organizers of the scheme deceived more than 13,000 consumers out of $13 million.
“Instead of a reduction in interest rates, consumers, who were already in dire financial straits, found themselves saddled with an additional $995 credit card charge,” the FTC said.
The operation was based in Canada and New York, and utilized telemarketing boiler rooms in Orlando, Florida. The FTC said the defendants in the case operated under several different names, but often used “AFL Financial Services,” or variations of the name “AFL.”
According to the FTC’s complaint, the defendants – F&F Payment Processing Inc., Bajada Management Group Inc., Baird B. Fisher, Jacqueline M. Fisher, and others –used illegal “robocalls” to promise refunds to consumers if they did not save at least $2,500 as a result of lowered credit card interest rates. But they did not deliver on that promise, the FTC said.
“At most, the defendants sometimes telephoned credit card issuers and attempted to conduct three-way calls among the credit card company, the consumer, and one of the defendants’ so-called financial representatives,” the FTC said. “Often the defendants did not make these calls at all.”
When they did, the calls were unsuccessful. Some credit card issuers refused to participate in the calls.
In addition to banning the defendants from delivering prerecorded messages and selling debt relief services, the proposed settlement also prohibits them from:
- making misrepresentations about any goods or services, including anyone’s ability to obtain a loan modification or improve a consumer’s credit rating;
- misrepresenting the terms of any refund or cancellation policy, affiliation with any government or non-profit program, or that a consumer will receive legal representation;
- violating the FTC’s Telemarketing Sales Rule;
- illegally calling numbers on the National Do Not Call Registry, or abandoning calls without involving a live operator; and
- failing to transmit caller identification, and failing to disclose the seller’s identity and the call’s purpose.