Several Orlando, Florida area debt relief companies which offered to reduce consumer’s credit card interest rates are banned from providing debt relief services.
The Orlando Division of the United States District Court for the Middle District of Florida entered judgment in the amount of $ 5.9 million against JPM Accelerated Services, Inc. of Melbourne, Florida, and
$ 3.2 million against IXE Accelerated Services, Inc. of Altamonte Springs, Florida (Orlando, FL) and six individuals on November 9, 2010. The Federal Trade Commission settlement also bans the two related operations from making robocalls and selling debt relief services.
The FTC’s complaint alleged that defendants made thousands of illegal pre-recorded robocalls to consumers, identifying themselves only as “card services” and offering lower credit card interest rates. Consumers who responded to the call were transferred to telemarketers who falsely promised the consumer that they could dramatically reduce their credit card interest rates.
Consumers paid defendants up front fees ranging from $ 495 to $ 995. Consumers received very little in return. According to the FTC’s complaint :
“In some instances, after consumers complete and return defendant’s forms, defendants initiate three-way telephone calls with the consumers and the customer service departments of the relevant credit card companies that consumers listed on the forms. These three-way telephone calls merely consist of defendants verbally requesting (or prompting consumers to verbally request) that the credit card companies reduce the consumer’s credit card interest rates. … The credit card companies typically decline the request, and the call ends. These three-way telephone calls are often the total extent of defendants’ credit card interest rate reduction services.”
In other words, consumers paid at least $ 495 for services that were highly unlikely to work and which the consumer could have performed themselves. “Interest rate reduction”
programs scams are more common than I would have believed, the predators who operate them charge vulnerable credit card borrowers a lot of money.
The FTC’s complaint provides some insight into why desperate consumers would part with their hard earned money :
“During telemarketing calls, defendants claim to have the ability to substantially reduce consumers’ credit card interest rates. In many instances, defendants claim that they can obtain very low interest rates, such as 4 to 7 percent, for consumers. Defendants also often claim that their interest rate reduction services will provide substantial savings to consumers, typically $ 2500 or more, in a short period of time, and will enable consumers to pay off their debt much faster, typically three to five times faster, without increasing their monthly payments”
Defendants claims to have a 98% success rate. Defendants often also offered a money back guarantee but rarely refunded the fee charged to consumers for purchasing the defendants’ ineffective services.
The FTC’s complaint also alleged that defendants also violated the Telemarketing Sales Rule by calling consumers on the Do Not Call Registry, blocking or “spoofing” caller ID, and making unlawful robocalls.
The judgments against the credit card interest rate programs totaled
$ 9.1 million. This indicates that somewhere between 9,100 and 18,200 consumers paid the defendants between $ 495 to $ 995 to negotiate lower credit card interest rates with their credit card banks. The borrowers’ response to the robocalls indicates how desperate many consumers are to continue to pay their credit card accounts.
(C) 2010 Donald E. Petersen
All rights reserved.