The Federal Trade Commission banned five Arizona and Florida companies that allegedly were responsible for millions of illegal pre-recorded robocalls from "Rachel" and "Cardholder Services."

The defendants allegedly placed automated calls to consumers, typically with a prerecorded message from “Rachel” or someone else from “Cardholder Services" purporting to have an “important message” regarding an opportunity to reduce high credit card interest rates. 

The five complaints filed last week are against the following companies and principals: 1) Treasure Your Success, 2) Ambrosia Web Design, 3) A+ Financial Center LLC, 4) The Green Savers, and 5) Key One Solutions LLC. Each complaint alleges, among other things, that the defendants violated the FTC Act by misrepresenting that consumers who buy their services:

    •    will have their credit card interest rates reduced substantially; and
    •    will save thousands of dollars as a result of lowered credit card interest rates.

Four of the five complaints also charge that the defendants violated the FTC Act by making other misrepresentations, such as claiming that consumers who buy their services will be able to pay off their debts much faster as a result of lowered credit card interest rates and making false claims about their refund policies.

In general, the calls began by asking consumers to press number one to connect with a live representative, or press number two to discontinue getting such calls. Consumers who press one were
connected to live telemarketers. Most consumers have no way to screen the calls using Caller ID, as the incoming number allegedly is often displayed as a false number. 

In many cases, the name displayed on the Caller ID is so generic, such as “Card Services,” that it provides little information about the caller.

According to the FTC, consumers reaching a live telemarketer were then pitched deceptive offers to have their credit card interest rates substantially reduced, sometimes to as low as 6.9 percent or even zero percent. 

The telemarketers allegedly guarantee that lowering card interest rates will save the consumers thousands of dollars in finance charges in a short period of time and will allow them to pay off the balances more quickly. 

Some telemarketers allegedly claim that consumers will 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.

In some cases, according to the FTC, 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.

After consumers have been “approved” for the program, the telemarketer informs them that there is an upfront fee, typically ranging from several hundred dollars to nearly $3,000. To convince them to pay, telemarketers often say that it will be more than offset by the money the consumer will save through the program.

In some cases, the FTC alleges that consumers’ credit cards were charged even if they did not agree to pay for the service. In other cases, the defendants allegedly do not disclose a fee at all, or claim there will be no fee.

The companies allegedly often claim to have a no-risk guarantee, saying that if they don’t provide consumers with the promised rate reductions and finance charge savings, they will refund the fee. 

However, consumers who later complain to the companies find it difficult, if not impossible, to get their money back. After consumers pay the upfront fee, the FTC alleges, they typically find that the companies do little or nothing to lower their credit card interest rates.

The only thing that some companies do is 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. 

In some cases, the companies also may apply in the consumer’s name for a new credit card with a low- or zero percent introductory interest rate. But according to the FTC, even if a new card is issued, the consumer is unlikely to see the promised savings, as the credit limits likely are low and the introductory rate often goes up after six or 12 months. Consumers often find that they cannot transfer their balances to these new cards.

“At the FTC, Rachel from Cardholder Services is public enemy number one,” said FTC Chairman Jon Leibowitz. “We’re cracking down on illegal robocalls by bringing law enforcement actions and pursuing technical solutions to the problem.”

The FTC gets more than 200,000 complaints each month about telemarketing robocalls. At a recent Robocall Summit, the FTC issued a challenge to the public offering a $50,000 cash prize for the best technical solution to block illegal robocalls on landlines and mobile phones.

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