Consumer Notes

Article excerpt

False Credit Card Protection

Beware foxes guarding the henhouse; or, as the case may be, deceptive telemarketers selling protection against unauthorized credit-card purchases--and then billing the credit cards for the service without authorization!

The National Association of Attorneys General (NAAG) reports three separate governmental actions against deceptive telemarketing of credit-card fraud protection services.

In one case, the state of Oregon settled its charges with a Canadian company, Fraud Watch Services, Inc., doing business as American Fraud Watch. The company allegedly exaggerated the need for credit-card protection and then charged consumers' credit cards without authorization. The agreement requires the company to cease doing business permanently in Oregon, provide full refunds to consumers who requested their money back, and pay $2,000 to the state's Department of Justice Consumer Protection and Education Fund.

Minnesota recently accused two companies of selling credit-card protection services with fraudulent telemarketing pitches. First Capital Consumer Membership Services Inc., and Consumer Alliance Inc. allegedly told consumers falsely that credit-card protection services are legally required and that the consumers would be held legally liable for all unauthorized charges to their credit cards. The companies also allegedly misrepresented themselves by saying either they were with Visa/Mastercard or with the government. The defendants are also accused of falsely telling consumers that the companies already possessed the consumer's credit-card number and were merely asking for verification of the number for security purposes. In addition to enjoining the companies permanently from such practices, the state is seeking civil penalties and restitution.

Finally, five states, the Federal Trade Commission, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Better Business Bureau, and Canada are suing seven different companies for deceptive credit card fraud protection sales and unauthorized billing for the services. The defendants are Consumer Repair Services; First Capital Consumer Membership Services, Inc.; World Wide Telecom, Inc.; Forum Marketing Services, Inc.; Advanced Consumer Services, doing business as (d.b.a) TTN Talks and Least Cost Utilities; Capital Card Services d.b.a Capital Card Protection; and T.S.I. Financial Services. …