A Philadelphia company that used telemarketing services to pitch platinum credit cards has settled charges brought by the Federal Trade Commission and agreed to never again sell credit cards or make cold calls.

Operating under the names Apogee One Enterprises and Marquee Marketing, company principals Blake Rubin, Chase Rubin, Justin Diaczuk and their organizations must pay fines and restitution totaling $7.5 million. The settlement blocks the marketers from getting back into business or benefiting in any way from consumers' credit profiles.

Investigators froze the companies' assets in February after responding to consumer complaints related to unauthorized checking account deductions. The companies falsely claimed the "Platinum Trust Card" and the "Express Platinum Card" would work with merchants who accept Visa, MasterCard and American Express.

FTC investigators learned that the marketers called consumers who had applied for payday loans online, promising instant credit limits of up to $9,500 in exchange for a $99 advance fee and a $19 monthly fee.

However, the card's customers learned that they could only use their new credit lines at the card's own online store. FTC officials said the marketers sold "off-brand, overpriced products" and failed to honor promises to report cardholder activity to the three major credit bureaus.

The settlement caps off an investigation that began in January, as part of the FTC's initiative to target companies that violated the FTC Act and the FTC's Telemarketing Sales Rule. According to FTC officials, many telemarketing scams use online payday loan applications to identify potential victims.

Boiler room operators promise instant approval credit cards, with no credit report pulls, while asking for upfront fees or bank account information.

Current Federal Reserve rules limit a credit card's annual service fees to 25 percent of an account's credit limit. However, pending litigation seeks to resolve the question of whether a bank can assess an application fee or a processing fee before a new account is officially opened. 

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