Consumer Finance Insights
July 31, 2015

FTC Mails $9.9 Million to Consumers Affected by Credit Card Debt Relief Scam

On July 30, the Federal Trade Commission (FTC) announced that it will mail checks totaling over $969,000 to consumers who lost money as part of a credit card interest rate reduction scam.  In June 2013, the FTC brought suit in the Middle District of Florida against a payment processor and telemarketing company, alleging violations of the Federal Trade Commission Act and Telemarketing and Consumer Fraud and Abuse Prevention Act.  The FTC alleged that the company cold-called consumers, promising them that if they paid a fee ranging from $500 to $2,000, the company would reduce the consumers’ credit card interest rates, despite failing to do so.

In September 2013, the FTC and telemarketing company stipulated to an order permanently enjoining the company from engaging in telemarketing, and assessing a monetary judgment of $9.9 million.  In June 2014, the payment processor stipulated to an order permanently enjoining the company from continuing its business practices, and ordering a judgment of $3.4 million.  All but $400,000 of the judgment was suspended, and the payment processor’s judgment is in partial satisfaction of the telemarketer’s total judgment.