If you haven’t received the frequent, annoying and intrusive robocall from “Rachel” with “Cardholder Services,” you’re a rarity. But it turns out the calls offering interest rate reductions to consumers with large balances and high interest rates on their credit cards are more than just exasperating. They’re fraudulent.
Arizona Attorney General Tom Horne has filed a lawsuit in Maricopa County Superior Court alleging that several related Arizona and out-of-state telemarketing companies have defrauded thousands of consumers nationwide out of millions of dollars since 2006.
Consumers who answered robocalls or other sales calls were told the company could negotiate lower credit card interest rates and provide them with a 0% credit card to transfer their balances. Consumers were guaranteed a savings of $2,500 in interest and finance charges for their payment of $900 or more for the service. However, customers rarely received an actual interest rate reduction or low rate credit card, but instead received a computer generated payment plan that simply demonstrated they could save money by making higher monthly payments to their highest interest rate credit cards.
The complaint accuses the defendants of violating the Arizona Consumer Fraud Act, the Arizona Credit Services Act and the Arizona Telephone Solicitations Act, and asks the Court to bar defendants from further telemarketing, impose civil penalties for each Defendant of up to $10,000 for each violation as well as provide restitution to the victims. The Federal Trade Commission has also commenced legal action against the defendants and provided valuable cooperation and assistance to the State in the investigation into this matter.
This case was handled by Assistant Attorney General Rebecca Salisbury. The complaint, which names the defendants and their companies, can be read here.