Telemarketers selling dubious debt assistance plague consumers in U.S. and Canada
New York, NY – June 10th, 2009 Consumers across the U.S. and Canada are sounding off to Better Business Bureau about incessant automated telemarketing calls promising to lower interest rates on their credit cards. Not only are the calls a nuisance and violate U.S. and Canadian Do-Not-Call laws, but some companies behind the calls are ripping off consumers by charging large up-front fees to negotiate lower interest rates with credit card companies—something consumers can do on their own for free.
According to figures cited by the White House in January, credit-card debt increased 25 percent in the past 10 years, totaling $963 billion – with per household credit card debt now at nearly $9,000. Knowing that so many families are drowning in debt, telemarketers offering suspect financial assistance are taking full advantage of the situation. Consumers have reported receiving calls as early as three in the morning and on both their cell and home phones even when they have registered the numbers with federal Do-Not-Call lists. Consumers also tell BBB that, despite their requests to the telemarketers to stop calling, the calls continue to come.
“These relentless callers are casting a wide net hoping to catch those who are anxious to lower their credit card debt. They take advantage of the emotional stress so many are under and persuade people that they can do something special to help reduce their interest rates, but, in reality those fall victim are being “sold” something they can do on their own without having to pay a fee,” said Claire Rosenzweig, President and CEO of the Better Business Bureau Serving Metropolitan New York.
“Cell phone spam may not be the biggest problem we have to deal with, but we got the FTC to shut down the car-warranty robocalls and now it’s time they shut down the other robocallers as well,” Schumer said. “These calls cost consumers hundreds in wasted cell phone minutes or much, much more if they get caught in the trap being laid by these unscrupulous companies. The perpetrators behind the credit card interest rate calls have also found a way around the Do Not Call List. The FTC has to track them down and then shut them down to put an end to this nuisance once and for all.”
BBB has received numerous complaints about two Orlando-based companies, CSTR Solutions, Inc. and Genesis Capital Management, and one Tacoma-based company, Mutual Consolidated Savings. All are behind at least some of the robocalls and are promising to save people anywhere from $2,000 to $25,000 by negotiating lower interest rates with credit card companies.
Robocalls generally begin with recorded messages that include statements like: “There are no problems currently with your account, however, it is urgent that you contact us concerning your eligibility for lowering your interest rates to as little as 6 point 9 per cent,” or, “This is our final attempt to reach you since you have not responded to our other calls to discuss your credit card debt.” The automated message invariably does not include the name of the company, but may claim to be with Card Services or Card Holder Services. Complainants inform BBB that they now believe the calls were designed to deceive them into thinking their credit card company was contacting them.
After the initial recorded message, consumers must dial another number to be connected to a live person. The live “operator” usually starts the sales pitch by asking for the consumer’s credit card number and whether the consumer is interested in lowering their interest rates. From there, callers begin closing the sale, asking if the consumer is willing to pay – usually from $700 to $1,000 - to have their firm contact the credit card company and negotiate lower rates.
“We are pleased that Senator Schumer (D-NY) has helped draw attention to this situation,” added Rosenzweig. “These calls are upsetting and have the potential to cause harm. We will, therefore, continue to focus the light on these heavy-handed telemarketers so that fewer people fall victim to their tactics.”
According to BBB complaints, companies are failing to uphold money-back guarantees and not refunding money in cases in which they are unsuccessful in lowering rates.
BBB offers the following advice for consumers who receive robocalls from companies offering to lower their interest rate:
- Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer. Always research the company first by reviewing its Reliability Report at www.bbb.org.
- When considering any company offering any type of financial assistance, insist on getting a contract in which all terms and conditions are clearly explained before signing up or providing credit card or other payment information.
- U.S. consumers can place their home phone number on the federal Do Not Call list by visiting www.donotcall.gov. If the consumer’s number is already on the list but continues to receive telemarketing calls—or is receiving robocalls on a cell phone—he or she can use the same Web site to report the incident to the FTC. Canadian consumers can learn more at www.lnnte-dncl.gc.ca.
About BBB
BBB, the leader in advancing marketplace trust, is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than four million local and national businesses and charities. Please visit www.bbb.org for more information about BBB.