Deceptive Credit Card Telemarketing Calls Stopped by Judge

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.

According to the FTC, over the past two years, the companies made calls to consumers claiming that they could negotiate with credit card issuers to substantially lower the interest rates on the consumers’ credit cards. They also allegedly delivered prerecorded “robocalls” that consisted of urgent-sounding messages from “Card Services” or “Financial Services,” stating that consumers needed to “press one” to speak to a representative about their credit card interest rates. Many consumers believed the calls were from their credit card companies.

Consumers who signed up for the services were charged from $499 to $1,590 up-front and promised their money back if the companies failed to deliver at least $2,500 in interest rate savings. Instead of arranging reduced interest rates, the companies 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 or had a $199 “nonrefundable fee” deducted from their refund.

The FTC alleged that AMS, Rapid Reduction, PDMI, and their owners violated the FTC Act and the Do Not Call and other provisions of the Telemarketing Sales Rule by (1) deceptively promising consumers they could reduce their credit card interest rates; (2) misleading consumers about their refund policies; (3) illegally calling numbers on the National Do Not Call Registry; (4) failing to honor consumers’ requests not to be called again; and (5) making pre-recorded telemarketing calls to consumers without their express written consent. Nearly all such calls have been illegal since September 1, 2009.

U.S. District Judge Lonny Suko has issued an order appointing two receivers to take over the businesses and freezing the assets of Advanced Management Services NW LLC, doing business as AMS Financial, Rapid Reduction System LLC, and PDM International, Inc., doing business as Priority Direct Marketing International, Inc. (PDMI).