Three companies that made claims that they could help consumers reduce their credit card interest rates — and then charged fees of up to $1,590 — have been shut down by the Federal Trade Commission. “The last thing debt-ridden consumers need is to be deluged by illegal robocalls – especially when all the calls are offering is a scam,” said FTC Chairman Jon Leibowitz.
The three companies are Advanced Management Services NW LLC, doing business as AMS Financial; Rapid Reduction System’s [sic] LLC; and PDM International, Inc., doing business as Priority Direct Marketing International, Inc.Among other things, the FTC says the companies would boast that they could help consumers reduce their credit card interest rates, but would really just send out information about how to pay down your balance early and save on interest.
According to the FTC’s complaint, over the past two years, the defendants made or authorized calls to consumers nationwide, 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 issuers.
Consumers who signed up for the defendants’ services were charged from $499 to $1,590 up-front and promised their money back if the callers failed to deliver at least $2,500 in interest rate savings, the FTC alleged. Instead of arranging reduced interest rates, the complaint states, the defendants 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 outright, got the run-around, or had a $199 “nonrefundable fee” deducted from their refund.
At the FTC’s request, a federal judge has shut down the three companies and frozen their assets.