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Scam Alert: Credit Card Interest Rate Reductions

So imagine getting a phone call from a telemarketer stating that they can reduce your credit card’s interest rate…sounds great doesn’t it? Don’t get your hopes up yet. In an article listed on the Federal Trade Commissions website, dated February 2011, the FTC has issued a Consumer Alert warning regarding this very scam.

It states “At the request of the Federal Trade Commission, a federal court has stopped a Canadian telemarketer that targeted consumers throughout the U.S., falsely claiming it could reduce their credit card interest rates. According to a complaint filed by the FTC, the defendants have sold credit card interest rate reduction services since December 2005, claiming affiliation with consumers’ credit card companies. The complaint alleges that the defendants promise to effect credit card rates between 4.75 percent and 9 percent, thus saving consumers at least $2,500, and that if consumers do not save that amount their money will be refunded. The complaint also alleges that the defendants engaged in Caller ID spoofing, causing consumers’ caller identification services to display telephone numbers that do not belong to the defendants, but rather to innocent victims whose telephone numbers are misappropriated.”

The article goes on to state that the defendants use three-way telephone calls between the consumers and their credit card companies and ask the companies to lower the consumers’ credit card interest rates. The results are usually denied and that’s where the consumer realizes that they are in a scam. The case also states that the consumers are claiming that the defendants do not honor the refunds that the consumers were promised who do not experience substantial savings.

The FTC’s website states “The defendants were charged with violating Section 5 of the FTC Act and the FTC’s Telemarketing Sales Rule (TSR) by falsely representing that they are affiliated with consumers’ credit card companies.”

A scam alert issued by Better Business Bureau states in an article by a New York-based company, which identified to a consumer as Easy Financial, called to negotiate lower credit card interest rates. The employee promised APRs between 6.99 percent and 4.99 percent on her two credit cards, which carried interest rates of 12 percent and 14 percent. The consumer states her credit card was charged immediately for the $1,500 fee for the service, and she was told she had 30 days to cancel the service. A conference call was set up and, though the company failed to get her rate reduced, her balance was transferred to another card. She also stated that she requested within the 30 days to cancel the service and get her refund of $1,500 back, but was denied.

The FTC says that if you’re looking to reduce the interest rate you’re paying on your credit card purchases, your best bet is to handle it yourself for free: call the customer service phone number on the back of your credit card and ask for a reduced rate. Be calm, patient and persistent. And if you are tempted by the promises in a rate reduction robocall, the FTC says hold off — and hang up.



Principal & Founder
This article was written by Mark Sadaka, a seasoned trial lawyer in nationally significant cases. He fearlessly champions clients impacted by fatal or severe injuries caused by others or corporations. Renowned for his expertise in complex litigation, he's featured in books, sought after by media for interviews, and a highly sought speaker. Notably, he exclusively represents individuals facing life-changing injuries or substantial financial losses.

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