The marketers of a “Rapid Debt Reduction” plan who promised to lower interest rates on credit cards – for an upfront fee of up to $899 - agreed to pay $1.5 million to settle Federal Trade Commission charges that they misled consumers.

The FTC’s complaint alleged that Mutual Consolidated Savings (MCS) and its affiliates and principals used cold calls, pre-recorded "robocalls," and the Internet to push a phony "Rapid Debt Reduction" plan to consumers in the U.S. and Canada.

The defendants convinced consumers to pay $690 to $899 for the program, claiming they would reduce credit card interest rates, save consumers thousands of dollars and help them pay off their debt three to five times faster than they could under their current payment schedule. The FTC also alleged that the defendants failed to honor their money-back guarantee.

Under a court order, along with the financial agreement, which will be used to refund defrauded consumers, the defendants are banned from working in the debt relief industry and from misleading consumers or helping anyone else mislead consumers about any material facts regarding goods or services they are selling.

According to the FTC, the defendants called consumers whose telephone numbers were on the Do Not Call Registry, failed to honor consumers’ requests that they not be called again, transmitted fake Caller ID information, failed to identify themselves during telephone pitches and made illegal robocalls. Under the settlement, they must comply with the Telemarketing Sales Rule, including not calling consumers on the Do Not Call Registry.

If the defendants misrepresented their financial condition, they will have to pay the full amount of the alleged consumer injury, approximately $22.5 million.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry