FTC Hangs Up On “Rachel From Cardholder Services”

For several years, American consumers have been receiving unwanted robocalls with a recorded message from “Rachel” or one of her fictional co-workers at the vaguely named “Cardholder Services.” Not only are these calls often in violation of do-not-call regulations, they are also a scam to trick people our of their cash. Today, the Federal Trade Commission announced it had pulled the plug on five companies behind these scammy robocalls.

“At the FTC, Rachel from Cardholder Services is public enemy number one,” said FTC Chairman Jon Leibowitz about today’s actions, which also involved state agencies in Arizona, Arkansas, and Florida.

The prerecorded calls, if you don’t hang up on them, claim to have an “important message” abouta a way for consumers to lower their credit card interest rates. Pressing “1” gets you to a live telemarketer who talks you through the program, which included allegedly deceptive offers to have their credit card interest rates substantially reduced, sometimes to as low as 6.9% or even 0%. Some telemarketers allegedly told consumers they could 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.

More from the FTC:

In some cases… the telemarketers claim to be calling from the consumer’s credit card company. In other cases, they use “Cardholder Services” to suggest a relationship with a bank or credit card company. If the consumer expresses an interest in the rate reduction offer, the telemarketer sometimes conducts a purported “audit” to determine whether the consumer qualifies. Consumers provide their financial and personal information, and are then put on hold while the “audit” is completed. According to the FTC, the “audit” typically is used only to determine whether consumers have enough credit available on their credit cards to pay the company’s fee.

Once “approved” for the program, the customer is then told about the up-front fee, ranging from several hundred dollars to nearly $3,000. The telemarketers would say that the large fee would be more than offset by the money the saved through the program.

Some consumers said their credit cards were charged the fee even though they did not agree to it. Others say they were charged a fee without even being told there would be any up-front cost.

As is the case with these scams, once the fee is paid, the company does little or nothing to actually reduce the customer’s interest rates.

“The only thing that some companies do,” writes the FTC, “is to initiate three-way calls with consumers’ credit card issuers and orally request a rate reduction, a request that consumers could make on their own and that invariably is denied.”

Pressing “2” supposedly removes your number from future calls, but in reality does no such thing.

Furthermore, consumers could not proactively block these calls as the callers would use spoofed phone numbers to trick caller ID. This also made it harder for consumers to complain about these calls, as the number showing up on their phone was often unrelated to the actual caller.

The FTC and state authorities filed charges against five companies — Treasure Your Success; Ambrosia Web Design; A+ Financial Center, LLC; The Green Savers; Key One Solutions, LLC. — located in Arizona and Florida.

All five companies are charged with making misrepresentations to consumers in violation of the FTC Act, along with multiple violations of the Telemarketing Sales Rule for misrepresenting their services, making illegal robocalls, , calling numbers on the Do Not Call Registry, and collecting up-front fees.